PRIVATE BUSINESS

Committee of Selection

Ordered,
	That Phil Hope be discharged from the Committee of Selection and Lawrie Quinn be added to the Committee.—[Mr. Bob Ainsworth.]

Oral Answers to Questions

WORK AND PENSIONS

The Secretary of State was asked—

Child Support Agency

Bob Russell: If he will make a statement on the Child Support Agency reforms.

Huw Edwards: What plans he has to improve Child Support Agency procedures to recover arrears of maintenance owed by self-employed absent parents.

Andrew Smith: The new formula is clear, and has been well received by parents and staff. Performance on the new scheme is improving, with progress made in sorting out serious defects in its information technology, for which its suppliers are being penalised under the contract. We remain committed to getting average clearance by next April to six weeks, compared with more than 20 weeks under the old system. I am grateful for the efforts of CSA staff, including on enforcement, with compliance last year reaching 76 per cent. overall and 65 per cent. for the self-employed.

Bob Russell: I thank the Secretary of State for that reply. Any improvement is obviously to be welcomed, but does he accept that there is a fundamental flaw in the whole concept of the Child Support Agency? It was set up with the best of intentions, with all-party support, but surely the time has come to accept that the best reform would be the abolition of the CSA and the restoration of a family court system of payment.

Andrew Smith: I believe that there is a growing consensus on both sides of the House that we need a Child Support Agency—one that is able to do its job properly so that children and parents with care who need the money actually get it. That was not happening under the family court system, which is why the CSA was introduced in the first place. Everyone accepts that the old system was much too complicated, with more than 100 factors having to be taken into account in the assessment. The new system is simpler and will work better. We will raise the rates of compliance on cash and cases.

Huw Edwards: Does my right hon. Friend agree that many absent parents who are self-employed are evading their responsibilities to the parent with care and to the Inland Revenue? I should like to draw attention to the case of Deirdre Hilder, one of my constituents, whose former partner was, according to the Inland Revenue, apparently earning only £2.40 a week. The chief executive of the CSA has told me that he intends to ask the Revenue to investigate the case more thoroughly.

Andrew Smith: I commend my hon. Friend's industry and energy on behalf of his constituents, but obviously I cannot comment on individual cases here. However, my right hon. and noble Friend the Under-Secretary with responsibility for the CSA and I will be pleased to discuss individual cases further, where appropriate. I acknowledge what my hon. Friend says about the importance of improving compliance and enforcement, especially in relation to the self-employed. As I said in my initial answer, we have raised compliance for the self-employed to 65 per cent., and more resources are being put into enforcement. In the past couple of years, collection went up by £19 million and £44 million respectively. Stronger guidance has been given to staff, extensive use is made of Inland Revenue and other records, and arrears cases are being referred to specialist enforcement teams more quickly. I hope that that will help to address the performance issues that my hon. Friend has raised.

Angela Watkinson: I have corresponded about a constituent, a postman on a modest income. Under the old system, he pays about 50 per cent. of his disposable income in CSA payments for his responsibility in respect of one child. The response from the Department is that he will not be reassessed under the new system for at least two years. This man is in danger of losing his home because of accumulated debts. Could the Secretary of State arrange for people making payments under the existing system to be fast tracked in cases of hardship and debt?

Andrew Smith: I cannot give that assurance and I do not believe that it would be fair to pick out cases for changing over to the new system on a faster track. We have made it clear that we cannot move over to the new system for existing cases until we are absolutely sure that it is working properly, and that remains the case. I extend to the hon. Lady the same offer that I made to my hon. Friend the Member for Monmouth (Mr. Edwards)—for the Under-Secretary and I to meet to discuss individual cases. However, it seems that the individual case that she raises has already been thoroughly gone into. The hon. Lady is right that the new system, with its simpler formula, will be more readily accepted by parents who have to meet their payment responsibilities as well as by parents with care.

Anne Begg: I hope my right hon. Friend will not take the advice of the hon. Member for Colchester (Bob Russell) to scrap the CSA, because the new system will be much simpler, fairer and quicker. However, I was dismayed to discover, when the CSA gave evidence to the Work and Pensions Committee last week, that the new IT system still faces major delays and problems. That inevitably means that existing cases will take longer to move to the new system, as my right hon. Friend has already said. I am looking for his assurance that he will do everything in his power to improve matters, including ensuring that EDS—Electronic Data Systems—which is responsible for the IT failures, is surcharged or otherwise held to account for its failure to have the system up and running as quickly as it should have been.

Andrew Smith: I welcome my hon. Friend's positive remarks and share her commitment to ensuring that the new system works as effectively as it should as quickly as possible. I confirm that under the terms of the contract, EDS is penalised for non-delivery and poor service performance. I cannot go into the figures, but I assure my hon. Friend that the penalties involved are significant, both in absolute financial terms and in percentage terms. EDS has changed its senior management with responsibility for the project, and that has resulted in a better working relationship. Our senior officials are doing everything that they can, with EDS, to get the system working properly, and I can assure my hon. Friend and the House that the system will be managed closely.

Oliver Heald: I am sure that we all agree that we would like to see the CSA working effectively. Last week, its chief executive said that the situation with the new computer system was only slightly better than the worst-case position. A range of technical problems in the past few weeks have reduced productivity by up to 30 per cent. and the Public and Commercial Services Union has said that the system is so bad that it prevents CSA staff from performing their jobs properly. What are the implications of all those problems for CSA customers? Will the existing cases be put off even further into the future? Can the Secretary of State give an assurance about when the information technology at the CSA will be working satisfactorily?

Andrew Smith: Like the whole House, I want to see the system working properly as soon as possible. As I told my hon. Friend the Member for Aberdeen, South (Miss Begg), every step—including improving the management and invoking the penalty clauses—is being taken to lever up performance. Notwithstanding the shortfalls in performance, which are acknowledged and for which EDS accepts it has technical responsibility, the system is improving. More than 1,000 cases a week are being cleared and I shall shortly report further performance details to the House, from which the hon. Gentleman will be able to draw further conclusions.

Brian Jenkins: The question that my right hon. Friend has just answered is very similar to the one that I was about to ask, so I shall just ask him whether he is aware of the extra stress that the system's failure to comply with contract is placing on the work force?

Andrew Smith: Yes, I am. The technical defects, including the system going down or disappearing for periods, introduce into day-to-day working elements of unpredictability that have been difficult for staff to cope with. As I said earlier, I am grateful for the efforts made by the staff, but progress is being made and improvements in operations are being achieved notwithstanding the technical defects in the system. Further training is being provided to assist the staff in coping with the challenges.

Pension Credit

David Amess: How many pensioners will be in receipt of means-tested benefits as a result of the introduction of the pension credit by 2004–05.

Andrew Smith: The planning assumption is that around 3 million pensioner households will be receiving pension credit by 2006. Pensioners who qualify will be on average £400 a year better off, without the need for a weekly means test. We also expect an additional 250,000 pensioners to become newly entitled to housing benefit and council tax benefit from October as a result of the improved income and savings rules in pension credit.

David Amess: Does the right hon. Gentleman agree with the right hon. Member for Birkenhead (Mr. Field) that the means-testing strategy on which the Government have embarked, with the best of intentions, is not sustainable?

Andrew Smith: No, because we are replacing a regime where savings were penalised by pound-for-pound withdrawal with one where savings and modest occupational pensions are rewarded.

Peter Pike: Will my right hon. Friend confirm that the pension credit will in fact help many people with modest savings or a modest second income who were barred from additional help in the past? It will be a welcome boost to that group. Will he also confirm that publicity and preparations for the scheme are well under way and that people who do not receive the credit until October 2004 will have it backdated to the start date? I understand that that is one of the provisions of the scheme.

Andrew Smith: My hon. Friend is right on all counts. There is, as he says, a big improvement, in that the £12,000 ceiling on savings is being removed and savings below £6,000 are being disregarded. That gives much greater reward to people with modest levels of saving and occupational pension income, and is an incentive to save in the future.

David Willetts: The Secretary of State has just said that he expects 3 million pensioners to be receiving the pension credit in 2006. Will he confirm that 5.1 million pensioners will be eligible in 2006? If so, he will have just admitted that 2 million pensioners will not be receiving the benefits to which they are entitled. Will he admit that take-up of means-tested benefits is low and that one reason for that is the stigma still attached to them?

Andrew Smith: I think that, in his question, the hon. Gentleman may be confusing pensioners and pensioner households, but I shall examine the figures that he mentioned. If he wants to know the equivalent take-up rate for the 3 million planning assumption, it is 73 per cent. However, I stress that we want pension credit to go to all those who are entitled to it, which is why we are writing to all pensioners and why we shall be mounting an extensive publicity campaign later this year.

David Willetts: Does the Secretary of State agree with a report that states
	"take up of some means tested fiscal measures remains low . . . partly due to the stigma still attached"
	to them? That document was produced on the No. 10 website last week, signed by the No. 10 strategy unit, the social exclusion unit and the Office of the Deputy Prime Minister. It has not been sexed up, it is not dodgy; those are the facts. Does the Secretary of State agree with that analysis?

Andrew Smith: No, I think that if anything promotes and entrenches wholly outdated and wrong concepts of stigma it is the hon. Gentleman and the Conservative party, who keep talking about the take-up of these entitlements as though they were a stigma. Those people were awfully stigmatised by the previous Conservative Government. The introduction of the Pension Service and the fact that pensioners will receive their money from the Pension Service and not from social security is a big step forward in tackling stigma. Making it easy for people to receive their entitlement, as we are doing, removes barriers and reminds people that it is their right and not something that they are being given as a favour—the hon. Gentleman is wrong to suggest that it is.

Steve Webb: The Government have made much of the fact that under the pension credit a pensioner has to contact the Pension Service only once every five years. Can the Secretary of State clarify the position of a typical pensioner with a basic pension and a company pension who receives the pension credit in year one? In year two, what does the scheme assume has happened to the company pension? If it assumes that the pension has risen when it has not, there is risk of an error, and if it is assumes that it has not risen when it has, there is risk of an error—or does the person have to phone and report the change in circumstances?

Andrew Smith: People can take advice from the Pension Service on those matters at any time, if they want to do so. The way the system operates means that they do not have to be reassessed for five years unless there has been a significant and material change. It does not sound as though the hon. Gentleman was putting to me a significant or material change.

Annabelle Ewing: In the light of recently highlighted problems about the take-up of means-tested benefits by pensioners in Scotland, and as many pensioners unfortunately do not receive their entitlements, can the Secretary of State tell us whether a specific take-up target will be set for Scotland for the new pension credit?

Andrew Smith: All regions and Scotland and Wales will be trying to get as many people as possible to take up pension credit. Of course, there will be extensive publicity in Scotland and through the Scottish media, as well as the work being undertaken by the Pension Service, including the local pension service. I went out with the local pension service in Scotland, visiting pensioners in a sheltered housing scheme, so I could see just how much help those people gave pensioners and how readily it was received. I am confident that such efforts from our first-rate staff will increase take-up in Scotland, as elsewhere.

Pension Uprating System

Paul Flynn: What the current level of the basic state pension would be for a couple if the system used for uprating from 1980 to 1997 had been continued.

Andrew Smith: The basic state pension for a couple would have been £440 less this year if we had stuck to the pre-1997 formula—£115.30 a week, rather than £123.80. We have guaranteed that, for the remainder of this Parliament, we will increase the basic state pension by 2.5 per cent. or the September retail prices index, whichever is higher. So pensioners will continue to do better under our Government that they did under the Conservative party.

Paul Flynn: I am grateful to my right hon. Friend for that answer. Does it not prove that the various non-means-tested increases that the Government have introduced since 1997 have given pensioners a fair deal—the increases have been at least equivalent to the level that would have existed had the link between pensions and earnings been restored. Is not that a wonderful example? Are not the Government entitled to give themselves a slap on the back for being far fairer with pensioners than what happened during the 17 years of effective cuts, every year, by the mean-spirited, tight-fisted Tories?

Andrew Smith: Yes, and the lesson that the public must learn is: never let them take it away.

Archy Kirkwood: Will the Secretary of State confirm that the recent Government response to the Green Paper is the Government's last word on uprating and other matters for the foreseeable future? Does he acknowledge the continuing concern about the relationship between the current architecture of state pensions provision and the private sector, particularly in regard to the possible disincentives to save? Will he consider extending Mr. Adair Turner's remit in the pension commission, so that he may continue to study that important problem?

Andrew Smith: Of course I studied carefully and responded to the very helpful report of the hon. Gentleman's Select Committee on those matters, including the suggestion that there ought to be more research about the interaction between the structure of the state system and levels of private and occupational pension saving, which, as he will know, is by no means a simple and straightforward matter. The terms of reference of Adair Turner's commission are very clear; they have been reported to Parliament, and I do not intend to change them, but they include provision for the commission to examine the effects of the state structure on private and occupational pension saving, so far as they are relevant.

Benefits Payment

Ian Lucas: What action he is taking to ensure that jobcentres advise customers that benefits can still be collected in cash at their local post office.

Des Browne: The Department is writing to most Jobcentre Plus customers affected by the changes in the way that state and war pensions and benefits are paid. A personal letter and leaflet will let them know about the change to direct payment and will give them the facts that they need to make an informed choice about which account option is most appropriate for them. New customers will have the options explained at the point of claim and, as jobseekers regularly contact our Jobcentre Plus offices as part of normal business, those occasions will be used as an opportunity to discuss direct payments.

Ian Lucas: I am grateful to my hon. Friend for that reply. Is he aware that Wrexham jobcentre has issued local information to customers, stating that they can have their benefits paid directly into private bank accounts but not saying that those benefits could be paid into Post Office card accounts? Will the Department please institute an instruction that jobcentres should advise all customers that they can have their benefits paid into Post Office card accounts?

Des Browne: I was aware of the historical position that my hon. Friend reminds the House of—indeed, I am as pleased as he is that the position has now been resolved—as he wrote to my hon. Friend the Minister for Pensions some months ago. I can assure my hon. Friend that all Department for Work and Pensions staff who deal with customers have received appropriate training about direct payments that highlights to staff the options available, including that of making payments into Post Office card accounts, which can be collected from their Post Office branch.

Oliver Heald: The Minister will know that about one in four of the 2.8 million people who have been contacted so far about transferring to direct payment have failed to respond—almost 750,000, according to the Department's figures. Problems with changes in the benefits system are not unusual, but the question arises: what happens in 2005 if there are still hundreds of thousands of customers who have simply not told the Government whether they want their pensions and benefits paid into a bank account or a Post Office card account because they have simply not responded? At questions last month, the Secretary of State pledged that all those who wanted to access their cash at the post office could do so. Will the Minister therefore tell the House exactly what failsafe system will be in place to ensure that this pledge is met in all such cases?

Des Browne: The hon. Gentleman is turning scaremongering into an art form in relation to the payment of benefits and pensions. He is well aware, as he points out in the preamble to his question, that changes of this nature take some time to follow through. In our view, there is sufficient time to achieve the objectives that have been set. For those who are unable to collect their benefits in the fashion offered by direct payment, an exceptions system will be available, as he is aware.

Nick Brown: I congratulate my hon. Friend on his new appointment and wish him well with his new responsibilities. He will find in the modernisation of the working-age services provided by the Department great opportunities to help those who need our help the most. He will also find that there are great opportunities merely to deliver the services that we provide more efficiently. Can he tell us something about the impact of modernisation on the Department's fraud targets?

Des Browne: I thank my right hon. Friend for his characteristically generous remarks in welcoming me to my new position. He has served this Government and the people of the United Kingdom with great distinction in a number of key posts in Government and has considerably more to offer. I thank him for the inheritance that I received from him—not only the work that he did in relation to the roll-out of Jobcentre Plus but the significant work that he did in the creation and maintaining of the best labour force market statistics that this country has ever had.
	My right hon. Friend asked me a specific question in relation to fraud, which I am pleased to answer. He knows that more than 100 pensioners have their order book stolen every week. Of course, direct payment modernisation will eliminate that risk. He knows the effect that lost or stolen giros can have on the delivery of the principal business of Jobcentre Plus—getting people into work—which I saw for myself last week in Willesden. He also knows that if modernisation has the effect that we hope it will have on fraud, we shall save at least £80 million every year.

Pension Service

Norman Lamb: If he will make a statement on the performance of the Pension Service, with special reference to the speed of dealing with cases.

Malcolm Wicks: The new Pension Service is committed to providing the best possible service to its customers. However, I am of course aware of particular difficulties relating to staffing in the Norwich pension centre, and that pensioners in the east of England are not receiving an acceptable level of service. That is not good enough, and I apologise to those affected. The regional team has developed a recovery plan, which I have discussed with the Pension Service chief executive. This plan will improve processes and increase the number of trained staff to deal with the work load over the coming weeks.

Norman Lamb: I am grateful to the Minister for confirming what the situation is like at the Norwich regional office. Many pensioners are becoming desperate while they wait weeks on end for their claims to be processed. What confidence can we have about the introduction of the pension credit later this year, given the current debacle in local pensions offices, and given what happened with the introduction of the child tax credit earlier this year?

Malcolm Wicks: We have special centres dealing with pension credit applications. With regard to the Norwich pension centre, which I visited in the early days of my career as a Pensions Minister a week or so ago, more staff are being recruited. A further 11 front-line telephone agents joined the centre this week, and last week a further 80 were recruited and are now undergoing training. I am keeping under close attention the situation in Norwich and have apologised to constituents for the poor service. I invite the hon. Gentleman to visit the centre and see for himself what improvements are taking place.

Tom Harris: I, too, have received a number of complaints from pensioners in my constituency about the length of time taken and the process involved when applying for several of the benefits. However, they are vastly outnumbered by the pensioners in my constituency who are materially better off thanks to some of the benefits introduced by the Government, notably the minimum income guarantee. Will my hon. Friend assure the House that criticism of the process will not divert the Government from their main task of materially improving the quality of life of the vast majority of pensioners in the United Kingdom?

Malcolm Wicks: I thank my hon. Friend, not least for acknowledging the hard work of the very good staff in the Pension Service. When there are problems, we will acknowledge them, but we are moving in the right direction. The service is new and there are many new buildings, as is the case in Norwich, and new staff have been trained. The objective is clear: we want to offer more support for many of the poorest pensioners in our community. That is why pension credit is so important, not least to elderly women, who tend to be poorer than men. Indeed, two thirds of those benefiting from pension credit are women.

Andrew Selous: The Minister will know that the script used by members of the Pension Service mentions the Post Office card account very much as the last option available. Will he reassure the House that when Pension Service members talk to the public, they will mention the Post Office card account on an equal basis with other means available? If he does not do that, suspicions will persist that the Government do not favour that type of account.

Malcolm Wicks: In all our literature—I am happy to look it at with the hon. Gentleman because I take the matter seriously—and the script used by our colleagues in the centres, the Post Office card account is given prominence alongside other options. Significant numbers of people, not least pensioners, are asking for the Post Office card account—about half those pensioners are asking for that account. That is fine because it meets the pledge that those who want to continue to go to the post office to get their pension will be able to do so, and I assure the hon. Gentleman that that is the case.

Graham Allen: Does the Minister accept that on Friday, a post office in Nottingham, North received the first ever urban post office grant in order to keep it open? The subsidy is worth about £50,000 and we are very grateful. However, the postmaster told me that he needed the subsidy because when pensioners in the area phone the Minister's Department, the Pension Service or the Inland Revenue, they are often told that they should open a bank account but not told to use their local post office. Will he ensure that there is joined-up thinking so that some Departments do not encourage people to withdraw from post offices while others subsidise post offices so that they may be kept open?

Malcolm Wicks: We have to lay out the options to people honestly and fairly. If anything ever goes wrong with that, we will investigate it seriously because that is important. Large numbers of people are asking for the Post Office card account, which is important for the Post Office because if we are to save our post office networks—both rural and urban—post offices must become modern banking centres for the Post Office card account and, increasingly, a place where customers of other banks and building societies may get their money out. That will add to the economic value of post offices in the future.

Nigel Waterson: May I begin by congratulating the hon. Gentleman on his recent promotion to Minister of State? Given the Secretary of State's description of the Department's computer systems as "very decrepit", what steps is he taking to ensure that the introduction of pension credit does not degenerate into the sort of fiasco that we are witnessing on tax credits and the Child Support Agency?

Malcolm Wicks: I thank the hon. Gentleman and welcome him to his post. I look forward to his recovery—although we might have verbal brawls, we have not been involved in anything more serious.
	The computer system that we are using is tried and tested. We know that it works and it will work in this instance, as the record will show. We are confident that we will deliver pension credit. Let us remember that the poorest pensioners will receive on average £400 a year pension credit and many will get more. Whatever our differences on the policy approach, I hope that every Member of Parliament will get behind the measure, because many thousands of people in the average constituency stand to gain from it.

Disablement Awards

Michael Clapham: What plans he has to change the medical criteria used to decide disablement awards for (a) vibration white finger and (b) chronic bronchitis and emphysema; and if he will make a statement.

Maria Eagle: I acknowledge my hon. Friend's great expertise in this field and compliment him on his continuing efforts on behalf of his constituents who have acquired industrial disease and injury while in the mining industry.
	As my hon. Friend is aware, we asked the Industrial Injuries Advisory Council to carry out a review of prescribed disease A11, commonly known as vibration white finger, and its report is expected at the end of the year. We have no current plans to change the medical examination process for prescribed disease D12, chronic bronchitis and emphysema.

Michael Clapham: I thank my hon. Friend for that answer and am encouraged by the referral of vibration white finger to the Industrial Injuries Advisory Council. However, I encourage her to refer COPD—chronic obstructive pulmonary disease—to the council, too. She will be aware that both diseases are prescribed diseases and that there are two systems of examination—one for compensation and one for state benefit. People become confused when they are awarded compensation but denied state benefit. If she were prepared to make the change, it would set the basis for persuading the Department of Trade and Industry to introduce a no-fault liability scheme at the end of the tort scheme for COPD, which concludes on 31 March next year.

Maria Eagle: I always take a great deal of notice of what my hon. Friend says on the subject, because his interest in it and expertise are well known. He will know that the Industrial Injuries Advisory Council reconsidered the lung function test in 1999. He will also know that the social security lung function test is, in many ways, more generous than the test operated by the DTI. I understand where he is coming from, but he must be aware that the two schemes—the DTI tort scheme and the scheme that we run—are different. One is based on an individual personal injury claim going through the court. The other is a much more general collectivist scheme that is based on simpler and different tests, with different hurdles. Although I will consider what my hon. Friend suggests, I cannot promise to do as he says.

Hywel Williams: Do the Government have any intention of extending disablement awards to former slate quarry workers? The Minister will know that slate quarrymen are already covered by the 1979 Act as far as dust is concerned, but surely there is a very strong case for extending those benefits to the few elderly men and widows who are left after the closure of the north Wales slate industry.

Maria Eagle: I am happy to consider that. The hon. Gentleman will be aware of the requirement that one has to work for 20 years underground to obtain the benefit, but I will be happy to consider any evidence that he brings to me to convince me otherwise. As I said to my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham), I will listen, but I do not undertake to do as the hon. Gentleman suggests.

Jim Sheridan: While it is right that the medical criteria for compensation and disablement benefits are constantly reviewed, can the Minister assure the House that those who do not meet the medical criteria do not receive a double whammy in the sense that they are then discriminated against when seeking work? What role does she see for the Disability Rights Commission? Is there a need to enhance that role?

Maria Eagle: My hon. Friend will be well aware that my Department has just undertaken a major push to assist more disabled to get back into work. We hope that that will involve all kinds of people, whether they have had disabilities from an early age or have become disabled because of industrial injuries or disease, for example. We aim to ensure that we reduce the number of people on sickness and incapacity benefit by ending discrimination in the workplace and ensuring that we help those people overcome the barriers that they face in returning to the workplace.

"Pathways to Work"

Huw Irranca-Davies: What responses he has received to the pathways to work consultation.

Maria Eagle: The Green Paper "Pathways to Work" set out a strategy for enabling people on incapacity benefits to move into work. Our response to the consultation, published on 10 June, gives details of the responses that we received, together with our plans for implementing the pilots.
	I recognise that my hon. Friend has a particular interest as his constituency will be in the Bridgend and valleys pilot area, providing an exciting opportunity for the community that he represents to lead the way. I can confirm that excellent progress is being made in establishing that pilot and that I will visit it in the first week of the recess.

Huw Irranca-Davies: I thank the Minister for that answer. She is no doubt encouraged, as I am, by the excellent work that Bridgend and Rhondda Cynon Taff have already done in piloting many of the new initiatives designed to assist people back into work. Will she assure me that that will benefit those who have been struggling to get back to work for many years, because that is what we should focus on? I am sure that she will have read the report of the recent Adjournment debate on economic inactivity in Westminster Hall.

Maria Eagle: My hon. Friend can be assured that I read his remarks in his debate, and naturally I agreed with all of them. I make it clear that anybody in his constituency, whether they have just come on to incapacity benefit or have been claiming it for many years, will be able to take advantage of the pilot scheme. Although it is aimed at those who are just coming on to incapacity benefit, any existing claimant who wants to take part can volunteer and will be welcome.

Tim Boswell: As I pass from the not inconsiderable pleasure of shadowing the hon. Lady into the shadows, on this subject at least, may I ask her to fight firmly to root out any dualism in the system? The disability employment service is on target to place people, so it tends to place the easier cases and offload some of the harder ones on to the not-for-profit sector. In particular, will she remember that the situation of anybody who is incapacitated is by definition unique, in terms of both their disability and their economic situation and motivation? Will she ensure that the pilot scheme and, as she introduces it, the national scheme, are genuinely sensitive to the needs of the individual and their wish, and obligation, to get back to work if possible?

Maria Eagle: I thank the hon. Gentleman for the way in which he has shadowed me. He has graduated to higher education, and its gain will be our loss, although I am sure that his replacement will make every effort to follow in his footsteps.
	As the Minister responsible for disabled people, I recognise that those on incapacity benefit who want to get back to work face a range of barriers, such as a lack of skills or confidence after many years out of work, and only some of those problems can be laid at their door. The pilot schemes will enable us not only to test a range of interventions that assist the individual to feel ready and able to go back to work, both in medical and work-focused ways, but to tackle the attitudes, discrimination and other practical barriers faced by many of our fellow citizens who have spent years on sickness and incapacity benefit. We hope that the pilots will show a way forward that can be spread throughout the rest of the country.

Pension Credit

Simon Hughes: What steps he is taking to publicise the pension credit.

Malcolm Wicks: We began writing to pensioner households in April to explain the pension credit and invite advance applications. In addition, the 1.8 million people who receive the minimum income guarantee have been advised that they will be transferred automatically to the pension credit. Regional and national television and press advertising begins in September. We are also working at national and local level with organisations such as Age Concern to spread the good news about the pension credit.

Simon Hughes: Given that the figures apparently show that nearly 3 million people will not have an automatic entitlement but will have to ask for their pension credit from October, why is it that many people will be written to after October and, indeed, up to next summer? Is it not the case that up to 70,000 people may die before they claim their entitlement? Will Ministers review the timetable and make sure that everybody is written to before the date on which they become entitled to the money?

Malcolm Wicks: I hope that the House will appreciate that it is logistically impossible to write to the whole pensioner population within a few weeks or even months. We are staffing up the centres and the telephone service as best we can, and we must perform the task in the right way. The pension credit comes into force in October, and people can apply then, but we will steadily write to people. The Liberal Democrats' cynicism about what happens when people die is not worthy of the party. I wish that Liberal Democrat Members would start to be positive in debates and not always be thinking of next weekend's press release.

Lynne Jones: Does my hon. Friend agree that welfare rights organisations such as citizens advice bureaux and local authority advice services have an important role to play in drawing pensioners' attention to their rights to benefits and in ensuring that they are calculated correctly? Will he ensure that such organisations are adequately funded? If one of his pensioner constituents came to his surgery with details of their income, would he be able to calculate for them exactly what pension credit they are entitled to?

Malcolm Wicks: As a former Minister for Lifelong Learning, I would certainly have a go. Despite being typecast as old-fashioned, stigmatising means-testing, the pension credit can be applied for over the telephone. One of our staff fills in the application, simply asking the pensioner to verify it. Minor changes of circumstances over a five-year period do not have to be reported. This is a new approach to targeting help on some of those who need it most. I hope that all Members of Parliament, who have thousands of people in their constituencies who can apply, will get behind it. We must make sure that we push take-up to as close as possible to 100 per cent. in due course.

James Arbuthnot: The Minister talks about targeting, but does he accept that the combination of the minimum income guarantee and pension credit will increase the number of people on means-testing and reduce the number who are encouraged to save over the years? Does he accept that the right hon. Member for Birkenhead (Mr. Field) knows a great deal about the matter and has made that point?

Malcolm Wicks: As I am trying to argue, pension credit is not the old weekly means test. The problem with the system that we inherited from the Conservative Government was that it penalised savings. People with a small occupational pension and savings in the Post Office had money knocked off, pound for pound, from their minimum income guarantee on income support. That was wrong. We want to encourage savings, and pension credit will do so.

Peter Lilley: I congratulate the Minister on his well-deserved promotion to his new role. Does he agree that the mind-boggling complexity of pension credit makes it difficult to publicise and undermines the savings culture? If he disagrees with me, could he explain, in the brief time that Mr. Speaker will allow, how to calculate the entitlement to pension credit for someone on low earnings?

Malcolm Wicks: We are already receiving a number of good reports from pensioners whom the Pension Service has written to and who have understood the leaflet and are applying for pension credit. The idea of being able to apply for it over the phone, when not the pensioner herself, but one of our staff expert in the matter calculates the entitlement, is a major advance. I thank the right hon. Gentleman for his congratulations and ask him to concede that the new system is an advance on the position under a previous Secretary of State.

Jobseeker's Allowance

Harry Barnes: What representations he has received in the past month on the arrangements under which jobseeker's allowance payments can be suspended.

Des Browne: The Department receives regular representations from members of the public and Members of the House on individual cases where jobseeker's allowance has been suspended or, more often, sanctioned. Those cases are dealt with on an individual basis, having regard to the circumstances of each case.

Harry Barnes: I welcome my hon. Friend to his new position. He did a fine job in the Northern Ireland Office and I sure that that work will continue in his present post. Is he aware that the labour market statistics on adjudication officers' decisions on jobseeker's allowance for 2002 show that there were 670,000 cases, in 49 per cent. of which benefits were reduced for different ranges and varying periods? Is that not an excessive number of cases, extremely time-consuming and of concern to everybody involved in the procedures? Would it not be better to tackle unemployment by creating fresh job opportunities, rather than pressurising those in vulnerable circumstances to ensure that they take every last opportunity available?

Des Browne: I am aware of particular statistics, as my hon. Friend knows, having brought them to my attention a short time after I became a Minister in the Department. I thank him for his kind remarks. May I reciprocate by reminding the House of his enviable reputation, particularly on campaigning for the unemployed and those who live in poverty? Consequently, I am sure that he is pleased about another statistic—a 46 per cent. reduction in the unemployment claimant count in his constituency since this Government came to power. The fact is that that did not happen on its own. It happened partly because of the target regime of jobcentres and Jobcentre Plus. There are no staff targets about increasing the number of people who are sanctioned or suspended. The only targets that those who work in Jobcentre Plus have in this area are those based on success in finding work. I am sure that he shares that aim.

Anne McIntosh: I congratulate the hon. Gentleman on reaching his new position. He and his Department are aware of the fact that Brandon's turkey factory in Dalton industrial estate in Vale of York has closed, with the loss of some 300 jobs. A large proportion of those jobs were held by agency workers. In what circumstances are those people eligible for jobseeker's allowance? Can he try to ensure that Jobcentre Plus is engaged at an earlier stage, before receivership is announced in a factory?

Des Browne: As I pointed out, Jobcentre Plus and jobcentres deal with individuals as individuals. Of course, there are benefits and support that all workers who are made redundant and lose their jobs, whether they were held with agencies or directly with the employer, can, do and have received from Jobcentre Plus. Indeed, a fine example is what happened at MG Rover, which I recently visited with Jobcentre Plus staff from Birmingham. There are no more experienced people for helping just the sort of constituents to whom the hon. Lady refers. If I can be of any direct assistance to those constituents, I shall be happy to oblige.

Deferred Pensions (Compensation)

Kevin Brennan: If he will take steps to compensate deferred pensioners in final salary occupational pension schemes that are in the process of being wound up where the fund will not meet its obligations.

Malcolm Wicks: As my right hon. Friend the Secretary of State explained to my hon. Friend when they met last week, we are very sympathetic to the plight of his constituents and others in a similar position. Indeed, it is because of such cases that we are strengthening member protection and introducing a pensions protection fund. However, as we have made clear, while we will listen to constructive proposals, we do not want to give false hope.

Kevin Brennan: I thank my hon. Friend for that reply. I welcome him to his post and pay tribute to his predecessor, who also listened carefully to concerns about the issue that I have raised. Does he understand how ex-workers of Allied Steel and Wire feel, especially those who entered the steel industry when it was a nationalised industry and, as part of their conditions of employment, joined an occupational final salary pension scheme, paid into it for 40 years and found, months short of retirement, that it would be worth a fraction of what they had reasonably anticipated? Does he understand that those pensioners look to a Labour Government and the Minister for Pensions in that Government to turn the slogan of fairness and security in retirement into a reality?

Malcolm Wicks: I can understand that situation. These are groups of workers who have done absolutely the right and responsible thing in being part of the schemes, but who have suddenly been affected by a catastrophe. I pay tribute to my hon. Friend and others in the House who are campaigning on the issue. I am afraid that I must repeat, however, that it would be wrong for Ministers to raise false hopes about a solution. We are clear that, for the future, we can legislate with the protection fund to insure against the occurrence of such a serious social accident. We are listening to ideas, but that is all I can say. It would be very wrong if Ministers made comments in the House that raised hopes that may not be realised.

Sydney Chapman: The Minister will have realised from the question asked by the hon. Member for Cardiff, West (Kevin Brennan) that the pensions crisis is biting deep for many hundreds of thousands of people. There is particular disappointment about the ministerial announcement on the crisis last month, about which the victims of funded pensions were very concerned. While I perfectly understand that it is right not to hold out false hope, surely the question of compensation must be seriously addressed in respect of this very serious matter.

Malcolm Wicks: I share that concern, which I suspect is widespread in this House, but who would pay for that compensation; and if it is retrospective, how far back does one go? Those are difficult issues. The main task of Government is to ensure that such situations do not occur in future. I mentioned the pension protection fund. We are also going to require solvent employers who choose to wind up their pension schemes to meet their pension promise in full through a full buy-out. That is important. I can only repeat that whenever the hon. Gentleman and other hon. Members raise the issue, we will listen to any constructive proposals.

Frank Field: I, too, welcome the Minister to his new brief and look forward to seeing how he develops it. He rightly said that the Government are much concerned about the hundreds of thousands of our constituents who have lost all or part of their pensions. As part of that urgency to find the right solution, will the Government back the Pensions (Winding Up) Bill on Friday, or will they block it again?

Malcolm Wicks: It is important that we legislate where we can. I have referred to two major items among our own future pension legislation. Most of the key ideas in my right hon. Friend's Bill will be covered in the Government strategy; that is the best way to take the matter forward.

John Bercow: I find myself in alarming agreement with the hon. Member for Cardiff, West (Kevin Brennan) in underlining the simple fact that there is a great difference between an inability to meet a commitment and a patent unwillingness to do so. Can I implore the Minister, in a cross-party spirit, to underline at every turn the Government's intention to compel those who can pay to do so? It is unacceptable that large companies should deprive people of legitimate entitlements that were built up over a long period, and on the strength of which their expectations for their retirement are based.

Malcolm Wicks: Where there are existing laws and regulations, that is absolutely right, and our officials in the Department give that kind of advice in such circumstances. However, existing law does not cover every circumstance. That is why it is important that we legislate for the future.

Derek Wyatt: Returning to the point raised by my hon. Friend the Member for Cardiff, West (Kevin Brennan), I have in my constituency ASW Sheerness, from which people were made redundant a year ago. What investigations is the Department undertaking as to whether orphan funds are an appropriate way to satisfy the current deficits? Has the Minister considered an insurance that is retrospective? What would be the costs of an insurance that was taken forward, while the backward part was in deficit? I hope that I made that clear.

Malcolm Wicks: I repeat that we will seriously consider any proposals and are talking to hon. Members and other representatives. As regards orphan funds, that suggestion has been made, not least by my right hon. Friend the Member for Birkenhead (Mr. Field)—

Frank Field: Unclaimed assets.

Mr. Speaker: Order.

Malcolm Wicks: Another issue is that of unclaimed assets. However, there is no automatic connection between some of those funds and the pension crisis that we face. Many others who are facing past injustice could make legitimate claims. I have to repeat—we mean it seriously—that we will look at constructive proposals. It would be very wrong, however, if we made commitments in this House that we could not fulfil.

Benefits Payment

Andrew Robathan: How many benefit recipients have applied for (a) a Post Office card account and (b) a basic bank account.

Chris Pond: As of 27 June 2003, 450,000 customers have requested a Post Office card account. Almost 2 million customers have provided their bank account details. We do not differentiate between basic and current accounts when collecting account details from customers. I am today placing in the Library the latest key figures on progress towards conversion to direct payment.

Andrew Robathan: I think that it was before the hon. Gentleman took up his post that we had a debate on this issue during which the Minister for Pensions specifically stated that people were not being harassed into taking a basic bank account or having their payments made into their current card account. The very next day, I got a letter from a constituent who said, "I am 83 years old and I am being harassed not to take a Post Office card account." Will the Under-Secretary ensure that people have genuine choice, are allowed to have a Post Office card account if they wish, and are not compelled to have some other form of automated credit transfer payment?

Chris Pond: As the hon. Gentleman knows, 450,000 people have taken Post Office card accounts up. Half of all pensioners have already applied for one, as my hon. Friend the Minister for Pensions said a few moments ago. We are giving people genuine choices between a Post Office card account and a clearing bank account or a basic bank account. I shall be happy to consider the case that he suggests, but we want to ensure that people receive payment at the post office and on a weekly basis, if they wish. We are giving people genuine choices.

British Nationals (Guantanamo Bay)

Mr. Speaker: Before I call the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) to ask his urgent question, I wish to make it clear that it is a narrowly focused question about UK nationals in Guantanamo bay. Supplementary questions should be brief and limited to the matter raised in it.

Douglas Hogg: To ask the Minister to make a statement on the continued detention and trial of the two UK nationals in Guantanamo bay and what he proposes to do to safeguard their interests.

Chris Mullin: On 3 July, the United States designated six detainees, including two British nationals held at Guantanamo bay, as eligible for trial under a military commission. We have strong reservations about the military commission. We have raised, and will continue to raise them energetically with the US. The Foreign Secretary spoke to the US Secretary of State, Colin Powell, about that over the weekend and will speak to him again in the next few days.
	So far, neither of the detainees has been charged. However, we have made it clear to the US that we expect the process to fulfil internationally accepted standards of a fair trial. We will follow the process carefully.
	The US is aware of our fundamental opposition to the use of the death penalty in all circumstances. If there is any suggestion that the death penalty might be sought in these cases, we would raise the strongest possible objections.

Douglas Hogg: I am grateful to the Minister for his reply, and I acknowledge that he has always shown a great interest in cases where there may be a miscarriage of justice.
	Does the Minister share my concern for the plight of Mr. Begg and Mr. Abbasi? Under what law and in respect of what offences are they to be charged and tried? Is it correct that they are to stand trial before a military court? Will the trial take place in closed session? Does the tribunal have the power to impose the death penalty? Is it correct that there is no right of appeal outside the military process? Will the military choose the defence team?
	What steps have the British Government taken to ensure that the men are tried for offences known to the law and before courts of usual competence in such matters? What steps have been taken to protect their civil rights? Does the Minister agree that the Americans' proposals are wrong, potentially unjust and gravely damaging to their reputation?

Chris Mullin: As I hope I have made clear, we share the concerns that the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) and others have raised.
	The right hon. and learned Gentleman asked under what law the men would be charged. We understand that "designation" means that the persons concerned are subject to the order that governs military commissions and can now be charged and prosecuted. However, that is not automatic and we understand that matters will proceed on a case-by-case basis.
	We are still seeking information about the conduct of any trial. Indeed, we continue to express strong views about the way in which we hope that a trial will be conducted. The same applies to the right of appeal.
	We understand that the Americans will nominate the defence lawyers in some way. We are seeking further information about that, too. The right hon. and learned Gentleman will forgive me if I do not go into much detail, but many aspects are a cause of concern to us and we intend to pursue them all.

David Winnick: As someone whose loathing of terrorism is second to none, may I ask my hon. Friend whether he is aware that there is bound to be considerable concern in this country over how those two British citizens are to be tried by a military tribunal, and even more so at his mention of how the defence counsel is almost certainly to be appointed by the authorities? Should not the United States listen very closely and heed the concern of a close ally? I hope that it will do so, because the United States requires all the friends it can get.

Chris Mullin: I entirely agree with my hon. Friend. We hope that the United States will listen closely to the representations that he and others have made. Perhaps I should say that, in our view, it is strongly in the interests of the United States that these trials be conducted in a credible and transparent fashion, because that obviously will affect the respect in which the United States is held throughout the world.

Michael Moore: We must never lose sight of the terrible atrocities committed on 11 September 2001. All terrorists associated with those and other acts of international terrorism must be brought to justice, but that justice must be beyond reproach and match the highest possible international standards. The treatment of the detainees in Guantanamo bay falls well short of that. They have no legal status, the conditions in which they are kept are condemned by human rights groups, and British citizens are to be subject to a military tribunal which can impose the death penalty.
	The Minister says that he has strong reservations. Surely people have the right to expect more than that. Does he believe that if the tables were reversed, the United States would even begin to tolerate such a situation for its citizens? Will he confirm the date when the Prime Minister last raised these matters with the President of the United States, and whether he has summoned the American ambassador to explain the situation? Will he tell us why the Foreign Secretary's stated preference for a repatriation of the UK citizens to try them here has been rebuffed, and what further steps he intends to take?

Chris Mullin: As regards the conditions in which all those prisoners are held, the Prime Minister has, on a number of occasions, made it clear that he regards the situation in Guantanamo bay as unsatisfactory. He has indeed raised it with the Americans. I cannot give the hon. Gentleman precise dates off the top of my head, but as I said in my statement, the matter was last raised with the US Secretary of State, Colin Powell, over the weekend. It will be raised again repeatedly, I anticipate.

Michael Ancram: I congratulate my right hon. and learned Friend on securing this urgent question. I say to the Minister, for whom I have great respect, that I am surprised that the Foreign Secretary has not seen fit to come to answer this question when he was well enough to appear in Downing street this morning to defend the Government on another issue.
	No one has been a stronger supporter of the war against terrorism than me, but as I said in last Thursday's debate in the House, there is now considerable public unease at what is happening in Guantanamo bay. We know that two British detainees are to face the tribunals. Last Thursday, I raised a number of serious questions in the debate, but I failed to get an answer. I wrote to the Foreign Secretary again on Friday, asking the same questions. I have not received a reply. Some have been raised again by my right hon. and learned Friend. May I raise one or two more?
	What does the Minister understand to be the agreed format for bringing charges and for the subsequent trials of those detained at Guantanamo bay? Has any allowance been made for the fact that these are British citizens and British nationals? Will the tribunals proceed in public at any stage? Is he satisfied that the American military can provide an unbiased defence for those British nationals? What redress will be available to those who, I hope, may be released without charge in due course for spending time in Guantanamo Bay?
	I say to the Minister, again with all respect, that his answer to the original question is unsatisfactory and that, after 17 months, there must be more precise details available to the House about how the tribunals will take place. We are told that the Government have been making representations to the American Government, but we need a detailed report on the extent of those representations and what their results have been.
	We have accepted that in dealing with serious matters of terrorism force is sometimes necessary, and changes in rules and procedures are required, but we have always insisted that the rule of law must apply. Can the Minister assure us that that remains the case?

Chris Mullin: First, may I apologise for not being the Foreign Secretary? Secondly, I will chase up the matter of the right hon. Gentleman's letter of last Friday. The precise way in which the trials will be conducted is not yet clear, and we are taking a close interest in that issue. Many of the questions that the right hon. Gentleman asks relate to matters that we are pursuing with the United States, and I can endorse his last point about our concern that the trials be conducted within the rule of law.
	I should, however, add one note of caution, although in doing so I am in no way suggesting that the right hon. Gentleman was in any way hyping things up. It is probably not to the advantage of these defendants—or to that of any others—that we engage in megaphone diplomacy with the United States. This is a delicate and sensitive issue that has to be pursued in a delicate and sensitive way, but I repeat: we are pursuing all the issues in which he is interested and we shall respond to his letter as soon as possible.

Geraint Davies: Feroz Abbasi, who is a constituent of mine, faces a stark choice: to plead guilty and serve a 20-year sentence, or to plead not guilty and face an unfair trial characterised by his not being able to pick his own defence lawyer. His mental health has been badly affected by being incarcerated for 18 months in a 2 sq m cage, with 15 minutes' exercise twice a week. He is unable to cross-examine the witnesses, who may present unreliable and critical evidence based on plea bargaining. The case will be decided behind closed doors by a judge and jury from the military, who are predisposed towards finding a guilty verdict and imposing the death penalty.
	Will my hon. Friend now make every effort to ensure my constituent's repatriation and a fair trial in Britain, so that this kangaroo court in Guantanamo bay does not proceed? Otherwise, it could well result in the killing of my constituent, thereby playing into the hands of the terrorists and, indeed, of all those who want to undermine human rights, the rule of law and justice across the globe.

Chris Mullin: I understand my hon. Friend's concern for his constituent, and I should point out that, as he is probably aware, Baroness Symons met Mr. Abbasi's mother and her lawyer this morning and discussed the case with them. One concern that we are pursuing with the Americans is that in our view, all the evidence concerning the case against these people must clearly be made available to them, so that they are in a position to rebut it.
	We understand that the detainee does have the right to choose his own defence lawyer—if he meets the security requirements laid down by the Americans. However, it is clear that this matter will have to be checked out. As I have said, many of the details are not yet clearly known and we are seeking to establish them as soon as possible, but my hon. Friend can rest assured that we are going to take a close interest in his constituent's welfare.

James Arbuthnot: What is the Government's position on the United States' view that the Geneva conventions do not apply to these people?

Chris Mullin: It is something that we have discussed with the United States, and frankly, we disagree with them about it. It is an ongoing discussion.

Gerald Kaufman: Can my hon. Friend clarify the precise nature of the jurisdiction claimed by the United States over these alleged offences—given that so far, it has not been specifically alleged that they took place in United States' territory—or is the entire world now regarded by President Bush as being within his jurisdiction? Will my hon. Friend and the Foreign Secretary make it clear to the United States that the world will not tolerate what is regarded as a charade of justice, and that the death penalty is utterly unacceptable in this case, as indeed it is in others?

Chris Mullin: We have already and repeatedly made that clear, and we shall continue to do so. Discussions have continued with the United States about the terms on which the prisoners are held and on which they will be tried. At this stage, it is too early to be specific.

Edward Garnier: If the Government's apparently strong reservations fail to protect the human rights of the two detainees, be they innocent or guilty under English or international law, what does the Minister propose to do about it?

Chris Mullin: One thing I do not propose to do is to address the United States through a megaphone, which would have the opposite effect to the one the hon. and learned Gentleman and I seek. We must take events step by step. As I said to the right hon. Member for Devizes (Mr. Ancram), the issue is delicate and sensitive, and it must be dealt with as such. I am sure that any Conservative Government would proceed in exactly the same way.

Ann Clwyd: Does my hon. Friend agree that the United States is already discriminating between US and non-US citizens? That is not permitted under international human rights law, but what is permitted is a fair trial, and it is clear that if discrimination is taking place, there is no possibility of that. My hon. Friend knows that I have raised the treatment of the prisoners in Guantanamo bay many times publicly and privately, and in eight questions. I believe that they should all along have been held under the Geneva convention, and we must tell the Americans, quite clearly, that the situation is not acceptable.

Chris Mullin: We have made it clear to the Americans that many aspects of what has gone on at Guantanamo bay are not acceptable. We shall continue to do so. None the less, we must proceed step by step. It is a delicate situation, and that is all that I can say for the time being.

Richard Shepherd: The Minister said that the Government are raising the matter vigorously, but there is no evidence in what he has said that their action is indeed vigorous. The prosecution of British citizens has been on the cards for nearly two years, yet the Foreign Office seems woefully ignorant of the details of what that prosecution amounts to, or of whether those citizens are protected by prosecutors nominated by the court. It does not sound as though the Government are pursuing the matter vigorously, and this is a question of justice by international standards. The Government's vigour ought to indicate a little more fiercely that we hold strongly to the view of justice.

Chris Mullin: As the hon. Gentleman knows, I have taken some interest during my brief and undistinguished parliamentary career in matters of justice. We have made our views known forcefully to the Americans. The Foreign Secretary spoke to Colin Powell on this matter as recently as the weekend, and there are plans for further discussions. I do not think, however, that it will help anyone, least of all the two defendants referred to, if we start shouting and yah-booing at the Americans, which is not going to get us anywhere.

George Foulkes: I congratulate my hon. Friend and Baroness Symons on the vigorous way in which they have raised the matter. Does he share my concern that the more we talk about who represents the British defendants and what kind of trial there will be in the United States, the more we are distracted from what should be the Government's aim, which is to get those people here, to be dealt with under United Kingdom justice? Will the Minister confirm that that is the Government's principal aim? Will he also request the American ambassador to come in, which would be a highly symbolic act, in order that he may make it clear, not through a megaphone, but in the quiet but forceful way that I know he and the Foreign Secretary can deploy, that the matter is very important and that the ambassador should—I mean no disrespect to the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg)—pay particular attention to those who regularly support the United States, most recently in Iraq, and who feel strongly that an injustice is being perpetrated?

Chris Mullin: I am grateful for my right hon. Friend's congratulations. We will certainly make it clear to the Americans that it is in their interests that the matter should be dealt with openly and credibly. Bringing the defendants here to face trial is a more difficult issue. It has certainly been thought about, but I cannot give my right hon. Friend the assurance that he seeks.

Paul Marsden: Since the Americans have refused to transfer the British detainees to a British court, what steps have the Government taken to ask for them to be transferred to a court under the auspices of the United Nations, such as the International Criminal Court?

Chris Mullin: It would clearly be desirable for any trial to take place in a form that guarantees maximum international credibility, but the form in which it is likely to take place is that which is decided on by the Americans, and the precise terms of that are what we are currently discussing.

Jeremy Corbyn: My hon. Friend seemed to have some difficulty earlier defining the legal status of Guantanamo bay. What is the Government's interpretation of any law under which two British nationals have been held for 18 months without charge, without trial, without access to legal representation, and, as I understand it, in very poor conditions indeed? On exactly how many occasions have the British Government raised with the United States Government concerns about that and demands that the prisoners be repatriated to this country to face trial, if there are charges against them?

Chris Mullin: I cannot tell my hon. Friend on how many occasions the matter has come up, but it has come up repeatedly, and at all levels of the Government. I myself, in a previous incarnation, took part in a number of conversations on the subject. The Prime Minister made it clear from the outset that the situation of the detainees at Guantanamo bay is unsatisfactory and cannot continue indefinitely.

John Wilkinson: In the eventuality that the American prosecuting authorities were to tell the British Government that these persons had been engaged in armed combat against British soldiers in Afghanistan, what would be the attitude of Her Majesty's Government? Would they ask the Americans to bring them back to this country for trial on charges of high treason?

Chris Mullin: We are not going down that road for the moment. I was asked earlier about the jurisdiction under which the detainees are held and are to be tried. It is a US presidential order. As hon. Members probably know, the United States regards the detainees as enemy combatants and subject to US military regulations. Whether we agree with it or not, that is the position of the United States.

Adrian Bailey: I, too, have three constituents among the detainees, and I share the concerns that have been raised about the proposed judicial procedures for the two who have been named. Have the US authorities given any indication yet about whether the three detainees from Tipton will be tried, and if so, under what judicial procedures?

Chris Mullin: No, I am afraid that I do not have any information about plans to try my hon. Friend's three constituents. Only the six who have so far been mentioned, including the two British citizens, have been designated as liable for trial.

Crispin Blunt: While the interests of the British detainees are extremely important, and it is an outrage and a scandal that the Americans have treated Mr. Walker, an American citizen, differently from the others, the more profound issue here is that the whole way in which the Americans are conducting this business is a considerable defeat for the values that we are all seeking to defend against terrorism. Is it not about time that language such as "delicate and sensitive", "strong reservations", and "cause for concern" was abandoned in favour of the megaphone, to convince the Americans of the folly of their actions?

Chris Mullin: No, I do not think that megaphone diplomacy ever works, so if the hon. Gentleman will forgive me, we will not go down that road for the time being. It would not do the six individuals, or indeed the other prisoners at Guantanamo bay, the slightest bit of good. It might give the hon. Gentleman some temporary satisfaction, but it would not make the situation any better.

Julian Lewis: Does the Minister agree that the Nuremberg and Tokyo military tribunals offer precedents for ways of dealing with people who have been accused both of atrocities and of waging illegal warfare? Would it not be a more constructive approach to the Americans to remind them of those precedents and of the fact that both those tribunals were held in the full glare of international publicity, with the defendants given every opportunity to put their side of the case?

Chris Mullin: Yes, that point is well taken. There are a number of precedents for dealing with enemy combatants captured in this way, if that is what they are. However, the road chosen by the US is clearly set down, and we have to negotiate around that position.

Nicholas Soames: Will the Minister remind the Americans that presidential orders are trumped by international law, and that all America's friends, while understanding the difficult and sensitive issues surrounding these issues, nevertheless deeply regret the harm being done to America's cause by their behaviour on this matter?

Chris Mullin: Yes, I certainly will pass that on. Indeed, I shall pass to the American ambassador the record of our exchanges this afternoon, so that the Americans can see for themselves how strongly Members of the House feel about that.

Simon Hughes: The Minister told us what the Americans say are their jurisdictional rights, but will he tell us clearly whether the British Government believe that every non-American citizen held in Guantanamo bay should be subject to some legal jurisdiction? If so, which jurisdiction—American, British or international law?

Chris Mullin: If the hon. Gentleman will forgive me, people are currently in the custody of the Americans and American law is being applied. As I told the hon. Member for New Forest, East (Dr. Lewis) a moment ago, it is around that that we have to negotiate, and that is how it is going to be for the foreseeable future. I repeat that we have said repeatedly that the present position in Guantanamo bay—and, indeed, the proposed military tribunal—is not satisfactory, and that we believe that there are better ways of handling those matters.

Patrick Cormack: While it is important for the Minister to pass on to the Americans the spirit of this afternoon's exchanges, will he also tell the Americans that we understand why those people were detained and that it is important—on this occasion, as on others—to take the greater safety of the greater number into account?

Chris Mullin: Yes, we all understand why those people were detained and that it is entirely right for them to face any legitimate charges against them. However, I am sure that the hon. Gentleman would agree that it would be better if the entire process commanded international confidence, which is what we are pressing for.

Andrew Tyrie: Is the Minister aware that The Economist reported in January that
	"American intelligence agents have been torturing terrorist suspects. They have been handing over suspects to countries such as Egypt, whose intelligence agencies have a reputation for brutality"?
	What efforts have the Government made to establish whether those reports are true, and what do such reports and the forthcoming trial say about the extent—or lack of it—of British influence over American policy at this time?

Chris Mullin: Yes, I have read the reports to which the hon. Gentleman refers. British officials have paid five visits to assess the welfare of the half—dozen British citizens who are held at Guantanamo bay. Those detainees are obviously our prime concern and we have the greatest influence—hopefully—over their fate. We have taken a closer interest in the welfare of our citizens than any other country with detainees there, and we have also raised general issues about the way in which the Guantanamo bay detainees are held and treated and in the manner of their trial. I did, indeed, read the reports and I share the hon. Gentleman's concern.

Hugh Robertson: I wholly share the concerns expressed throughout the House about the intolerable circumstances there, but is the Minister in a position to tell us whether any of the intelligence gained from the detainees will be any use in the war against terrorism?

Chris Mullin: I regret that I am not in that position.

George Osborne: In replying to my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot), the Minister went further than in other replies to say that he thought that America was in breach of the Geneva convention. Will he elaborate on what he said and also tell us what sanctions are available for countries in breach of that convention?

Chris Mullin: I think that the hon. Gentleman's question concerns whether the Geneva convention should apply to the detainees, and I have already made it clear that, in our view, it should.

Points of Order

James Gray: On a point of order, Mr. Speaker. On Wednesday 7 May, I asked the Prime Minister:
	"Does he also agree that all future conflicts will equally depend on RAF Lyneham?"
	He replied:
	"I think that I know the point behind the question, having visited the base . . . I accept and understand the very important role that it has played in previous conflicts"—
	this is the key point—
	"and, I have no doubt at all, will play in future conflicts, too."—[Official Report, 7 May 2003; Vol. 404, c. 688.]
	However, in a written statement on Friday, the Minister of State, Ministry of Defence said that
	"if no further Defence use is identified for RAF Lyneham, the Station will be closed and disposed of."
	That news, of course, came as a devastating blow to the 10,000 people in my constituency whose livelihoods depend on RAF Lyneham. Does not that statement bring Prime Minister's Question Time into further disrepute, and have you had any indication from the Prime Minister that he intends to come to the House to make a personal apology for what was, by any standards, a substantially misleading remark?

Mr. Speaker: The hon. Gentleman will have to ask the Prime Minister; the replies Ministers give are not a matter for me.

John Wilkinson: Further to that point of order, Mr. Speaker. You will have noted that that important announcement, which will damage the RAF's air transport capability in the future, was made in the form of a written statement. Can you use your influence with the Government to ensure that announcements of such significance and magnitude are made in the proper way—by oral statement to the House?

Mr. Speaker: My understanding, from the glance at Hansard that has been possible, is that the issue will not arise
	"until after the aircraft goes out of service by 2012."—[Official Report, 4 July 2003; Vol. 408, c. 38WS.]
	Perhaps the hon. Gentleman and others will have some time to pursue the matter.

Julian Lewis: On a point of order, Mr. Speaker. I apologise for not providing notice of my point, but are you aware of paragraph 137 of the report from the Foreign Affairs Committee, entitled "The Decision to go to War in Iraq", which reads:
	"We further conclude that by referring to the document"—
	the second dossier—
	"on the floor of the House as 'further intelligence' the Prime Minister—who had not been informed of its provenance, doubts about which only came to light several days later—misrepresented its status and thus inadvertently made a bad situation worse."?
	Given that the author of the main article on which the dossier was based, Mr. Ibrahim al-Marashi, testified to the Committee that his article and two other articles from Jane's Intelligence Review accounted for 90 per cent. of the second dossier, is it not clear that the Prime Minister did inadvertently mislead the House? Have you heard from him that he intends to come to the House at the earliest opportunity to set the record straight?

Mr. Speaker: Technically, the Prime Minister is coming before the House, because the Liaison Committee meets tomorrow—

Eric Forth: No.

Mr. Speaker: Order. The Prime Minister will be questioned by that Committee. In fact, the Liaison Committee meeting was set for tomorrow in order that the document that the hon. Member for New Forest, East (Dr. Lewis) mentions would be available.

Angela Browning: Further to that point of order, Mr. Speaker. I personally asked the Prime Minister a question on the second dodgy dossier, and I also wrote to him a month ago asking him to come to the House or to provide a written apology to me and others who asked specific questions on that issue. I accept that Committees carry out work on our behalf, but we are not all members of Committees. Is there no way in which a Member who has received such a reply from the Prime Minister can receive an apology on the Floor of the House, as we would expect from any other hon. Member?

Mr. Speaker: Apologies are for the Prime Minister and any other Minister with whom the hon. Lady takes issue. As I stated, the Prime Minister will have to give an account of his stewardship at tomorrow's Liaison Committee, which was set up by the House. The Prime Minister may also be asked questions, similar to those that the hon. Lady has put to me, at Prime Minister's Question Time.

Eric Forth: Further to that point of order, Mr. Speaker. Surely you are not suggesting, are you, that the Liaison Committee is now a substitute for the House of Commons? However eminent, important and superior it may be, it is not the equivalent of the Floor of the House of Commons and it does not give Members at large the opportunity to question Ministers. I do not want an immediate response from you, but I hope that you will not depart from the time-honoured principle that it is the whole House that is able to hold Ministers—including the Prime Minister—to account in the proper way. The Prime Minister must be prepared to come to the House, make a statement and answer questions from hon. Members as a whole, and not just go before a group of the elite and answer its questions.

Mr. Speaker: I am not changing policy. The Prime Minister will appear before the Committee tomorrow. That does not exclude the House from demanding anything, or from seeking the views of the Prime Minister on any other matter when the time comes. The House decided that the Liaison Committee would meet and that the Committee should ask questions tomorrow.

Pete Wishart: Further to that point of order, Mr. Speaker. You will be aware that none of the minority parties has seats on the Liaison Committee. What can you do to ensure that we in the minority parties will also have the opportunity to question the Prime Minister on this serious and significant issue?

Mr. Speaker: This is a matter for the usual channels. At the moment, I have enough problems with that.

David Wilshire: Further to that point of order—

Mr. Speaker: Order. We are eating into Opposition time. Does the hon. Gentleman realise that?

David Wilshire: I am most grateful, Mr. Speaker. My point of order arises from a comment that you made a moment ago when you said that the House had decided that the Prime Minister would appear before the Liaison Committee. I am not aware that the House had decided that. My understanding was that the Prime Minister had decided that he would do it that way. Is there something that I have missed, namely a resolution of the House that the Prime Minister should attend?

Mr. Speaker: There is something that the hon. Gentleman has missed. The House set up the Liaison Committee and the House has given the Committee authority to call witnesses before it. Tomorrow, the witness will be the Prime Minister. Opposition Day

[13th Allotted Day]

Government Targets

Mr. Speaker: I have selected the amendment in the name of the Prime Minister.

Michael Howard: I beg to move,
	That this House notes the abject failure of the Government to meet its targets for delivery on public services; believes the current public service agreement regime to be deeply flawed; is concerned in particular that the volume of targets and their rigid and centralised structure have stifled local initiative, diminished professional responsibility, distorted priorities and diverted time and attention away from the task of improving public services; regrets that the Government has used targets as a substitute for real reform; and calls on the Government to embrace the principles of professional autonomy, decentralisation, diversity and choice in the public services, in order to end its policy of taxing and spending and failing.
	I draw attention to my entry in the Register of Members' Interests.
	This debate is about the Government's record of tax and spend and fail. A fortnight ago, the Leader of the House called for an honest debate on tax. It is little wonder that he was slapped down. An honest debate on tax is the last thing the Government want. This is a Government who promised that they had no plans to increase tax at all, but have increased taxes 60 times and taken almost £44 a week extra in tax for every man, woman and child in Britain.
	Every year, the Government excuse their broken promises on tax because, they argue, that is the price that people have to pay if they want better public services. Every year, they say, there will be reform to improve public services. As the Chancellor said:
	"There is not to be one penny more until we get the changes."
	At the heart of the Chancellor's reforms was his system of public service agreements. They were, he said,
	"a contract for the renewal of public services".—[Official Report, 14 July 1988; Vol. 316, c. 188.]
	In those heady days, the Prime Minister backed up his Chancellor. He said:
	"By publishing clear measurable targets, we are making it possible for everyone to judge whether we meet them."
	So it is time to take the Prime Minister and the Chancellor at their word. It is time to judge them by their performance against their targets.
	Of course, that is easier said than done. Many of the Government's targets cannot be measured. The Treasury set itself a target of 2.5 per cent. annual efficiency gains. Four years later, it decided that it was unable to measure that.
	Other targets were targets to set targets. The Crown Prosecution Service and the Lord Chancellor's Department were set a target to set a target for reducing the time from arrest to sentence. Alas, they have not yet been able to assess progress on that target to set a target. Although the Lord Chancellor's report says that the target to set a target should have been met by March 2001, more than two years later that target, alas, still has not been set. Indeed, it seems that the Lord Chancellor's Department will go to its grave not having met its target to set itself a target.
	We must do the best we can, and the reality is that reports admit that more than a third of the targets set in 1998 have not been met, and a similar pattern is emerging for the 2000 targets. I emphasise that that is based on the Government's own information.
	What is the Government's response to that failure? Do they intend to change their approach to the public services? Not at all. First, they try to downplay the figures. Failing some targets, they say, is not too bad—they were challenging targets, ambitious targets—so hitting a fair few and missing the rest is really quite good. Of course, that is not what they said when they launched them. Then, the PSA targets were described as agreements between the Chancellor and the Departments concerned—contracts, in return for the largesse that the Chancellor was providing from the taxpayer. If the contracts were not honoured, there would be consequences. The Chancellor said:
	"Money will be released only if Departments keep to their plans."—[Official Report, 14 July 1998; Vol. 316, c. 188.]
	Downplaying the figures is not all that the Government do; it is not their only response. The Government's second response is to invent a whole new lexicon of euphemisms to disguise failure—their failure to meet education literacy targets: "Falling a little short"; failure on crime: "Further progress is needed in some areas"; and failure to tackle the delayed discharge of older people from hospital: "Challenges remain". In respect of the Treasury's own failed target on productivity, where productivity growth has halved and the gap with the US widened: "Outcomes mixed so far". [Interruption.] The Chancellor says from a sedentary position that I have given this speech before. He is right, and I shall give it again because these charges are true, these charges are sound and these charges demonstrate the failure of the Chancellor and the Government to improve this country's public services.

Andrew Miller: Does the right hon. and learned Gentleman accept that another euphemism for failed targets is "Conservative Government"? Does not he accept that the failure to set challenging targets was what brought down his Administration?

Michael Howard: The hon. Gentleman is living in a dream world, and I shall leave him in that dream world.
	The Government's third response to failure is to try to hide the truth. With 1 million families not receiving the tax credits for which they are eligible, what of the Inland Revenue target to deliver improvements in the number receiving their entitlements? There is no overall assessment. Today, the Commission for Integrated Transport says that Ministers have "overpromised and underdelivered" on the transport plan. The Government are failing to meet the five targets that really matter. Yet, with one in four trains now late, the Department for Transport has made no overall assessment of its target to secure improvements in punctuality and reliability on the railways.
	Even worse, other failures are counted as being passed or on course, such as the Treasury target of achieving an improvement in value for money in public services, year by year. In the real world, a 22 per cent. increase in national health service funding over two years led to a 1.6 per cent. rise in hospital treatments, but in the Chancellor's target world his target to secure better value for money in the public is somehow "on course."
	Let us take the education target to cut the number of pupils in classes of more than 30 to zero by September 2001. In the real world, in September 2001, 8,000 five, six and seven-year-olds remained in classes of more than 30, and the figure has doubled since, but in the Chancellor's target world none of that is true. That target was passed, according to the Government. What a wonderful place the Chancellor's target world must be—a world where a failure is a pass, a failure is a success, Tim Henman wins Wimbledon every year and the Government have kept their promises on the public services.

Ivan Henderson: In my constituency, two new primary schools have just been built and are about to be opened and a secondary school and another primary school are planned. Why were they not delivered when the Conservative Government were in power for 18 years?

Michael Howard: If the hon. Gentleman thinks that no new schools were built during the years of the Conservative Government, he is living in a dream world too, and he ought to give credit to the Conservative-controlled county council for the part that it has played in delivering those improvements in his constituency.
	When this Government make ludicrous claims such as 87 per cent. or 93 per cent. of targets being met, as the Chancellor and the Chief Secretary have, is it any wonder that they are accused of cheating and of misleading people? A memorandum to the Public Administration Committee exposes the fact that they believe that they have missed or have been unable to evaluate more than a third of the targets; they merely hoped that no one would do the arithmetic. Is it any wonder that the credibility of the Chancellor's target regime is now at rock bottom? Is it any wonder that no one believes a word that the Government say? The fact is that, on any reasonable assessment, they have not even managed to keep their failure rate down to a third. In reality, the number failed is considerably higher. Looking at the 2000 targets for which it is possible to make an assessment, it is clear that more than half are currently not on course to be met.

Charles Hendry: My right hon. and learned Friend will be aware that the Government have set a target that 90 per cent. of people going into accident and emergency should be seen within four hours, and that the target is measured in the last week of each quarter? Has he seen the figures from the Surrey and Sussex strategic health authority, which show that for 12 weeks out of 13 it failed dismally to reach that target, and the figure was about 80 per cent? In the last week, it cancelled leave, brought in supply staff and, miraculously, the figure went up to 90 per cent. Does not that show how the targets are fiddled?

Michael Howard: Indeed. I am grateful to my hon. Friend for drawing those figures to the attention of the House. That is an important target, to which I shall return in due course. That target and its consequences speak volumes for the failure of the Government on public services.

Tom Harris: One of the Government's targets that the right hon. and learned Gentleman has not yet mentioned—perhaps he will later in his speech—is to have 30,000 new nurses and 15,000 new doctors in the NHS by 2008. Does the Conservative party agree with that target?

Michael Howard: I will tell the hon. Gentleman this—[Hon. Members: "Answer!"] I am answering his question. I will tell him this about the number of new doctors in the health service—[Interruption.] The Health Secretary should listen instead of muttering from a sedentary position. The Government are always telling us how many new doctors are in the health service. It takes seven years to train a doctor, so if there are that many new doctors in the health service they must have started their training before this Government took office.
	What is most serious, however, is that the sheer number of targets and their centralised nature have often made things much worse. They have distorted priorities, stifled local initiative, contributed to the feeling of disillusionment among doctors, nurses, teachers and police officers, encouraged cheating and diverted time and attention away from the task of improving front-line services.
	The Chancellor's one big idea on the public services has not only turned into a shambolic farce but has been counter-productive. It has not only been a substitute for real reform but has taken things in the wrong direction. For example, the Government set a target for reducing school exclusions by a third. They have not met it. In the course of trying to meet it, however, they have achieved a massive decline in standards of discipline in our schools.
	The effects on the national health service have, if anything, been even more serious. Last week, Dr. Ian Bogle, the retiring chairman of the British Medical Association, said that the Government were turning the NHS into an organisation governed by "spreadsheets and tick boxes". It had become, he said,
	"the most centralised public service in the free world".
	One trauma surgeon at the Oxford Radcliffe hospital told the BBC's "Panorama" last week that there are people
	"hobbling around now who would have walked"
	had it not been for NHS targets distorting priorities. "Panorama" reported yet more serious results: because of the target to which my hon. Friend the Member for Wealden (Mr. Hendry) referred, whereby waiting times in accident and emergency start when a patient is officially handed over to hospital staff, patients have been left waiting in ambulances outside the hospital for five hours. While ambulances stand idle, it takes longer to answer 999 calls. This is the question that I ask the Chancellor: how many people have died because ambulances are not answering 999 calls as quickly as they would have done had it not been for his targets?

Edward Garnier: The situation in the national health service is even worse than the picture that my right hon. and learned Friend paints. Is he aware that, to avoid having to report that people are waiting in trolleys in accident and emergency departments, trolleys are simply moved to corridors outside the departments so that there are no longer trolley waits in A and E departments?

Michael Howard: My hon. and learned Friend is right, and that is only one example of the cheating that occurs in the national health service as a consequence of the targets.

John Reid: As the right hon. and learned Gentleman made the poisonous suggestion that people are dying rather than being saved, will he acknowledge that under the Conservative Government there were 400,000 fewer operations every year and 50,000 fewer nurses, and that general practitioner training—in complete contradiction of what he said when he inadvertently misled the House 10 minutes ago—was cut by 25 per cent.? Does he accept that 100,000 people every month now go through accident and emergency departments in fewer than four hours, whereas, under the Conservative Government, people had to sit in pain and discomfort because of cuts in the national health service?

Michael Howard: No, I do not. Let me remind the right hon. Gentleman of one of the statistics that he did not mention. If things are so wonderful in the national health service under this Government, why do three times as many people without any insurance—300,000 people a year—now have to pay for their own operations? It is because they are so distressed by the treatment and waits that they face in the NHS over which he presides.
	In the light of all that, is it any wonder that the Chancellor's colleagues are deserting him and disowning his targets? The Secretary of State for Trade and Industry said—

John Bercow: Where is she?

Michael Howard: It is not surprising that the right hon. Lady is not here because she would not want to hear what I am about to remind the House of. She said:
	"I think in the past we have sometimes fallen into the trap of frankly having too many targets".
	The right hon. Member for Holborn and St. Pancras (Mr. Dobson) said that the situation had nothing to do with him. He said:
	"There've been more and more targets imposed on the National Health Service since I ceased to be the Health Secretary and there weren't very many imposed by me".
	Even the Prime Minister says:
	"Maybe we have too many".
	The Chancellor seems to stand alone. Ever the centraliser, he is the only member of the Cabinet who is still prepared to defend his rigid and centralised targets, and it is for him to justify them today. After six years of tax rises, five years of public service agreements and literally hundreds of targets, where are the improvements to the public services that we were promised?

Angela Browning: I raised with the former Health Secretary, the right hon. Member for Darlington (Mr. Milburn), correspondence from consultants in Wonford hospital in Exeter showing that the craven focus on targets meant that they could no longer make clinical judgments about people on the list who had deteriorated and whose treatment needed to be brought forward. Is this not an example of the Government thinking that they know better than people who have trained for many years and who put patients' interests first?

Michael Howard: My hon. Friend is right.
	What is the result of all the targets? In the national health service, there are now more administrators than beds. A survey today reported that the national health service ranks between services in Slovenia and Poland for offering choice to patients. As I said, 300,000 patients without insurance were forced to go private last year—not by choice but because the service on the NHS is so poor.
	Figures today from the Qualifications and Curriculum Authority show that one in three children left primary school last year unable to read, write or count properly. Last year, more than 30,000 students left school without a single qualification. The gap between children in Britain's inner cities and elsewhere is growing. The British people are right to think that they deserve better. People are right to demand that the Government stop wasting their money. People are right to demand that the Government end their obsession with ludicrous targets, which prevent public service reform, not promote it. People are right to demand a Government who give them a fair deal.

Nigel Beard: Given the right hon. and learned Gentleman's diatribe against targets generally, if he were in charge of a major programme of public investment, how would he control it to ensure that the money achieves what is intended; or is it that he does not expect himself or his party ever to be involved in a major programme of public investment?

Michael Howard: It is certainly not the latter. The hon. Gentleman asks that question at the right time because I am about to deal with precisely that point.
	There is another way—a better way: the way of real reform. Real reform means allowing teachers to restore discipline in their classrooms. It means allowing police officers to get back on the streets to fight crime. It means allowing doctors to treat patients on the basis of clinical need, without constant diktats from Whitehall. It means trusting professionals to get on with their job. It means being willing to learn from the success of other countries. We want the priorities in our public services to be driven by the needs and wishes of patients, parents and local communities, not by distant civil servants sitting behind a desk in Whitehall.
	Last week, the Prime Minister told us what he had to offer: his 10th relaunch—more of the same. He said:
	"Six years is not such a long time in government"
	All he needs is a bit more time. He says that better public services are just around the corner, but that is where they always are. In 1997, he told us that there were 24 hours in which to save the national health service. In 1998, he said that the Government were delivering on their promises. In his new year's message, he said that 1999 would be the year of delivery on promises that the Government made, and that 2000 would be
	"when things would really start to happen".
	In 2001, Alastair Campbell said that
	"transformed public services is the key delivery aim of the second"
	term. But now they say that they need a third term in which to do that. They said they would do it in their first term. Then they said they would do it in their second. Now they say they will do it next term—in other words, some time never. All they have to show for their six years in office are higher taxes, failing services and more empty promises.
	The Government no longer even try to claim that services have improved; instead, they admit defeat. As the Secretary of State for Trade and Industry said so memorably on the "Today" programme on Friday:
	"When we talked about delivery, that may have been something of a mistake . . . We are not in government in order to show that we can be more competent than the Conservative Party was".
	After fiddling the figures and inventing a new vocabulary to disguise their failure, they are finally giving up. They still are not tackling the root cause of their failure: the total absence of real reform of the public services. Instead, they are preparing to ditch the one way in which they said their success on the public services should be measured—the yardstick against which they asked people to judge them. They know that they are being measured and judged. They know that everyone knows they are failing. So what do they do? They ditch the targets.
	"I think values are more important than targets",
	said the Secretary of State for Trade and Industry on Friday.
	"It can come across as a bit technocratic, a bit managerial",
	said the Prime Minister.
	"The Government had never said that setting targets was the totality of its approach to public service reform",
	said the Prime Minister's spokesman. No longer do they stand for delivery, they say. No longer do they stand for any pretensions to competence and no longer do they want their performance to be measured. They have broken their promises on tax, and because they have broken their promises on real reform they have broken their promises on the public services, too.
	Can there ever have been a Government who raised people's hopes so high, only to see them so cruelly dashed? Can there ever have been a Government who have promised so much, but delivered so little? All they offer for the future are more empty promises. This is a Government who have lost their purpose. This is a Government who have lost their direction. This is a Government who have now lost every vestige of their legitimacy to govern. The sooner they go the better it will be for patients, parents and all the people of this country.

Gordon Brown: I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
	"welcomes the Government's record extra investment in health, education and Britain's other vital public services; supports the Government's agenda of linking this investment to public service reform through Public Service Agreements to build high quality public services for all; welcomes the attainment of economic stability, with low inflation, low interest rates, and low unemployment; believes that the achievement of this platform of stability has made record extra investment in public services possible; supports the Government's determination to do nothing to put this stability at risk; believes that after years of neglect between 1979 and 1997 it is even more important to invest in our public services and that to fail to invest in health, education, and other vital public services would be deeply damaging; and supports this Government's resistance to any attempt at this time of global economic uncertainty to cut public spending."
	The Shadow Chancellor failed to tell the House that we have met our school class size target, our school exams pass target and our nursery places target. [Interruption.] The Opposition say that we have not met our class size target. We said that children should not be in classes of more than 30 pupils. When we came into power there were 450,000 children in classes of more than 30, and we have eliminated that problem, so we have met our class size target.

Michael Howard: rose—

Gordon Brown: I shall give way in a moment.
	We have also met the main juvenile offenders target, concerning the time between arrest and sentence; our homelessness target; and our debt relief target. It is interesting that the shadow Chancellor should spend half an hour talking about targets and fail to mention all the economic targets. We have met our inflation target, our debt target, our public borrowing target and our employment target. We said that 250,000 young people would move from welfare to work, and we not only met but far exceeded that target.

Michael Howard: rose—

Gordon Brown: I will give way in a minute.
	We will take no lectures from the Conservative party about meeting targets. The shadow Chancellor was a member of the Cabinet when inflation, which they said would be low went up to 10 per cent; when interest rates, which they promised would come down went up to 15 per cent; when public borrowing increased to 8 per cent; when 1 million people in manufacturing lost their jobs; and when unemployment went up to 3 million. The right hon. and learned Gentleman has no basis on which to lecture us—he is the last surviving member of the 1992 Cabinet on the Conservative Front Bench, and he should be ashamed of what he did.

Michael Howard: Can I now invite the Chancellor back into the real world? Can he confirm that on the last two occasions on which he set growth targets for the economy, he woefully failed to deliver? As for class sizes, can he confirm that his target was to eliminate the number of pupils in classes of over 30 by September 2001, but in September 2001 there were 8,000 five, six and seven-year-olds in classes of over 30, and the figure has doubled since 2001? It is going up, so how can he conceivably say that he met that target?

Gordon Brown: The right hon. and learned Gentleman exaggerates the position, as he did throughout his speech. On growth, we said that we would raise the trend rate of growth of the British economy, and that is what we have done. We have raised the trend rate of growth from 2.5 per cent. to 2.75 per cent.
	How would it be possible for us to do any more on class sizes or any other aspect of education if we accepted the shadow Chancellor's recommendation to cut education expenditure? Under the Conservatives, there were 50,000 fewer teachers; under Labour, there are 25,000 more.

David Laws: rose—

Gordon Brown: I will give way in a minute.
	The great thing about this debate is that we now have the Conservative party's policy documents before us, allowing us to compare what would happen to cost-effectiveness, choice, delivery and the elimination of waste under a Conservative Government with what is happening under a Labour Government. In the last few days, the Conservative party has helpfully published a document entitled "Setting Patients Free". Its theme is moving patients into the private sector by subsidising payment for private operations. It would be helpful for us to compare the effect of that with what the health service is achieving.
	We know that the number of out-patient attendances in the NHS has risen under a Labour Government from 11.5 million to 12.9 million. We know that the number of elective admissions has risen from 4.5 million to 5.5 million. But what would happen under the Conservative party's proposals? What would be the cost of operations, as against the cost in the NHS? Can we judge how many people would get operations under the Conservatives' proposals? What would the cost of those operations be? What is the effect of the Conservatives' proposals on administrative waste, and on choice and delivery?
	I have a document helpfully published this morning on the internet—not a PhD thesis, just a document from BUPA. [Interruption.] Nobody can claim that the BUPA document has been "sexed up". The cost of a heart bypass, as BUPA helpfully told us today—this is a 10 per cent. rise on the cost that we were told a few weeks ago—is £11,500 to £14,500. The cost of hernia treatment under BUPA is £1,400 to £1,950. The cost of a knee replacement is £8,500 to £10,800. The cost of a hip replacement is £7,000 to £9,000.
	The interesting thing, and the reason why I cite those figures, is that they allow us a comparison with the costs in the national health service, so we can now see whether the Conservative policy—[Interruption.] Is the shadow Chancellor denying that the Conservative policy is to subsidise people having private operations? Is he denying that the Conservative policy is to put public money into subsidising private health insurance? If that is the case, are we not entitled to ask, on the basis of the Conservative motion today, what is more cost-effective, what helps reduce administrative costs, and what will deliver the most operations?
	Let me give the House the figures. Conservative Members will be interested, because they will have to explain this to their constituents during the forthcoming elections. Let us see which is more cost-effective. A hip replacement under BUPA costs £7,000 to £9,000, according to the table issued today. What is the NHS tariff? It is £4,500. A knee replacement costs £8,500 to £10,800 under BUPA. What is the NHS cost? It is £4,800—half as much. What is the cost of varicose veins treatment under BUPA? From £1,400 to £1,900. What is the cost in the NHS? It is £1,000. A hysterectomy—

Michael Howard: Will the Chancellor give way?

Gordon Brown: I am happy to do so, if the right hon. and learned Gentleman can confirm those costs.

Michael Howard: If the cost of operations in the private sector is so much more than in the national health service, perhaps the Chancellor can explain to the House why the number of people who have elected to go to the private sector for those operations has tripled since the Government came to office—300,000 a year, compared with 100,000 a year when Labour came to office. Is not that whole tirade from the Chancellor doublespeak for saying that the NHS is more cost-effective because people cannot have their operations on the NHS? They have to wait so long for their operations on the NHS that they pay to go private instead.

Gordon Brown: No. The reason why I mention the figures is to show that if you want to give patients a better deal, you invest more in the NHS, which is half as expensive as investing in the private sector. The shadow Chancellor and the shadow health spokesman know very well that what they are proposing is that people be invited to pay twice as much in the private sector as in the NHS, but what would be more cost-effective for the country would be to build up the capacity of the NHS by spending more, rather than investing in private care.

Liam Fox: Will the Chancellor give way?

Gordon Brown: I am happy to give way to the man who told the Conservative Medical Society that his aim was to run down the national health service and to prove that it could never work.

Liam Fox: If the Chancellor is giving such great hope to patients in the NHS, perhaps he could explain one figure—the Government's own figure, which said that last year, despite the increase in expenditure, the number of admissions to NHS hospitals fell by 0.5 per cent. What does that say about value for money under the Government?

Gordon Brown: The number of elective admissions to the NHS has risen from 4.5 million to 5.5 million. The number of out-patient admissions has risen from 11.5 million to 12.9 million. The hon. Gentleman cannot deny that more people are receiving operations, being admitted and getting treatment, and that more operations are occurring.
	The policy question that the shadow Chancellor has not faced up to, as he has given way to the shadow Health Secretary on the question of funding, is that the first public expenditure commitment that he made was to put money into private medicine. The second commitment that he made was a tax commitment to give tax relief to private medicine. He has got to explain to this House why it is more cost-effective to put money into private medical care when the cost per operation is twice as much.

Michael Jack: rose—

Gordon Brown: I shall give way to the former Minister.

Michael Jack: Will the Chancellor tell the House what the current level of national health service expenditure is in buying operations from the very suppliers that he has mentioned? Will he also tell us how much the national health service is spending to send patients abroad? I have asked two questions, so can he give two answers?

Gordon Brown: The national health service—the right hon. Gentleman will agree with me on this—is absolutely right to buy operations in the private sector where there is spare capacity and everybody receives their operations free of charge in a national health service that is free at the point of need. The policy question that the Opposition have not worked through is why it is in the interests of the country to invest substantial additional amounts on building up capacity in the private sector when the cost per operation in the private sector, on the basis of the figures that he has not denied, is twice as great as in the public sector.

Gregory Barker: Is the Chancellor aware that his lectures on cost-effectiveness will ring very hollow indeed with my constituents? Women in my constituency who are waiting for radiotherapy treatment following breast cancer surgery are having to wait up to 24 weeks under this Government, when their surgeon says that they should be waiting three or four weeks. That figure has spiralled under his Government. It does not matter what the price is in the national health service if the treatment is simply not available.

Gordon Brown: Given that under the Conservative Government, only 63 per cent. of people suspected of having cancer saw a consultant within two weeks—the figure is now 98 per cent.—that is a ridiculous allegation coming from the hon. Gentleman. I have his election manifesto. Perhaps he will explain to me why he is now saying to his electorate something quite different from what he said in the general election. He said that Conservatives would spend more on the NHS. He also said, by the way, that they would spend more on the police, education and transport. How does he justify the 20 per cent. cuts in public expenditure that the Opposition propose, and the shadow Chancellor's refusal to commit the Conservative party to spending as much on the health service as the Labour party?

Angela Browning: Can the Chancellor not understand that, laudable as it may be that somebody whom a GP suspects of having cancer sees a consultant within two weeks, which is fine, the Government have, by meeting that target, pushed into the distance the vital treatment that cancer patients need? That is what causes the failure in the way in which they are treated. That is what is happening under his Government, and it is wicked.

Gordon Brown: More people are receiving cancer treatment in the national health service. The number has risen from 1.2 million to 1.34 million. If the hon. Lady will not admit the facts of the matter, she is seeking, like the shadow Chancellor, to continue to mislead people.

John Bercow: rose—

Gordon Brown: Perhaps the hon. Gentleman will tell us whether he agrees with his Front-Bench policy of not matching our spending on the health service.

John Bercow: I am most grateful to the right hon. Gentleman for giving way, as this is truly a hysterical speech from a rattled Chancellor in a clapped-out Government under a dodgy Prime Minister. Will he now tell the House why the target to cut by 40 per cent. the number of deaths resulting from strokes has been dropped?

Gordon Brown: It has not. We are committed by 2010 to cut by 40 per cent. the number of people who die from heart disease. [Hon. Members: "Strokes!"] I am trying to tell the hon. Gentleman what the commitment is.

Michael Howard: Does the Chancellor know the difference between heart disease and a stroke?

Gordon Brown: The hon. Member for Buckingham (Mr. Bercow) asked about strokes. We have made a commitment: there is a 40 per cent. cut to be achieved. We have already achieved 18 per cent. of that. In 1997, there were 39,000 heart operations; now, there are 54,000 heart operations. We have made tremendous advances through our heart strategy, and we shall continue to do so.
	Conservative Members have to explain why their main policy plank for the next election, which was announced only a few days ago, is to put extra money into a private sector that is costing twice as much, and therefore to deny the national health service the resources that it needs.

Several hon. Members: rose—

Gordon Brown: I am making progress. [Hon. Members: "No, you are not."]
	The second question that the Conservatives must ask themselves when comparing the cost efficiency and administrative savings that are likely under our policy, as against theirs, is whether their policy is fair, as well as being more cost-effective. Under the Conservative policy, as the Opposition health spokesman confirmed in his press statements only a few days ago, anybody who has a hip joint operation, a knee joint operation or a heart operation will have to pay a substantial amount of money—

Liam Fox: It is very clear that the Labour party, whenever it gets into a corner, resorts to the oldest trick of all, which is to lie, lie and lie again on a particular subject. It has been made perfectly clear that under the Conservative plans for a patient passport, patients will be able to take the NHS tariff to any NHS hospital that they want to go to; only if the patient chooses to go outside the NHS will they be able to take some of that money with them. There is a crucial difference between the Chancellor's view of tax and ours. He believes that when taxpayers pay money to a Labour Government, it is the Government's money; we still believe that it is the taxpayers' money.

Gordon Brown: The Opposition health spokesman can help us, then. Will the persons who are getting the benefit of that patient passport get free operations in the private sector or not? [Hon. Members: "Answer!"] Conservative policy has now been exposed for everyone to see. Not only is the private sector charging twice as much for such operations, but the Conservatives' patient passport would mean that they are not free operations in the private sector—that is, the health service paying for operations that it cannot do. Their policy is to encourage people to move into the private sector, give them a subsidy to do it, then land them with a bill for that treatment. This has been an illuminating discussion.
	Is it not the case that the minimum cost of a hip joint operation for a pensioner or someone else, even with the reduction that is proposed by the Conservative party, with the NHS tariff, or part of it, moving into the private sector, would still be £5,000?

Eleanor Laing: No.

Gordon Brown: No? Well, the hon. Lady should please correct us.

Eric Forth: On a point of order, Mr. Deputy Speaker. Is it not the case in this House of Commons that when a speaker sits down he has finished his speech?

Mr. Deputy Speaker: There is a grave danger when an hon. Member sits down for too long that it may be believed that his speech has ended. However, I do not believe that the Chancellor has finished his speech. [Interruption.] Order. Perhaps hon. Members could now settle down; we are debating serious matters and we should listen carefully to the Chancellor. I say respectfully to the Chancellor that the motion relates to Government policies, and he should address them.

Gordon Brown: I am grateful to you, Mr. Deputy Speaker.
	Government policies are yielding more operations in the health service, more out-patient and in-patient attendances, more cancer treatment and more heart treatment. The question is whether the scarce resources go into the private sector, under Conservative proposals, or whether they stay in the national health service. The shadow Health Secretary made the illuminating admission that people who move into the private sector, and are encouraged to do so through what is called the patient passport, will have to pay for hip joint, knee joint and heart valve operations. If the proposal involved the 60 per cent. tariff, which operates in Finland and which Conservative Members claim they want to examine, the cost to an ordinary pensioner, who may not have a great deal of savings, would be £5,000 for a hip joint operation, £6,000 for a knee joint operation and £7,000 for a heart valve operation.
	Is it fair to tell pensioners who have saved all their lives that their salvation lies in the private sector, when we know that the costs are £5,000, £6,000 and £7,000? The reason is that the administrative costs in the private sector are so much greater. The administrative costs of PPP Healthcare and BUPA are 14 per cent., 15 per cent. and 16 per cent. It is hardly surprising that the private health system in America takes 14 per cent. rather than 7 per cent. of national income. The private sector has also historically charged more for operations.

Liam Fox: rose—

Gordon Brown: I shall try to let the shadow Health Secretary rescue himself from the mess into which he has got his party.

Michael Jack: On a point of order, Mr. Deputy Speaker. A moment ago, you gave the House guidance that the debate was about Government targets. Will you confirm that I did not mishear? The Chancellor appears to have slid away to another debate on the costs of private health care, which is not related to the points that we are supposed to be discussing.

Mr. Deputy Speaker: Yes, I said that the debate was about Government targets. The Chancellor should address his remarks directly to those matters.

Liam Fox: Will the Chancellor give way?

Gordon Brown: I am happy to give way to the hon. Member for Woodspring (Dr. Fox).

Liam Fox: I want to point out to the Chancellor yet again that under Conservative party proposals, all patients could get their treatment free in any part of the NHS that they chose rather than being held in their locality as second-rate supplicants, as happens under the Government. I should like the Chancellor to answer one specific question. He is right that many of those who go into the private sector are elderly and do not have savings. What does it say about the Government's health policy that that number has trebled from 100,000 to 300,000 during the Chancellor's time in office? Why does he believe that they have gone to the private sector? Many of those people, who have few savings and have paid taxes all their lives—

Mr. Deputy Speaker: Order. That intervention was far too long. Let us revert to the motion.

Gordon Brown: I am grateful, Mr. Deputy Speaker.
	I am drawing a comparison between the Labour Government's policy, which means investing more in the NHS, leading to increases in out-patient attendances, operations, elective admissions, cancer treatments and heart treatments, and the Conservative party's policy, which would mean paying twice as much for an operation. The shadow Health Secretary has not answered my question. It will cost £5,000, £6,000 or £7,000 for people to get hip joint, knee joint or heart valve operations in the private sector under Conservative proposals. We are increasing the number of operations but we can do even more if there is money devoted to the public sector, not diverted to the private sector.
	Our choice is available to all. We want to provide 100 per cent. access to NHS Direct; 100 per cent. access to a general practitioner in 48 hours, and 100 per cent. access for cancer patients within two weeks. We have set those objectives, which are fair to everyone, not only to the few who have £5,000, £6,000 or £7,000 to afford to pay for Conservative party policies. The Conservative policy is a fair deal for BUPA and for private medicine, but not for poor pensioners.
	It becomes clear that the dividing line between the two parties in this debate and throughout the country until the general election is that we are making major improvements in the NHS, we are prepared to invest more and we are putting more spending in.

Michael Howard: rose—

Gordon Brown: If the shadow Chancellor will tell us how he proposes to finance the 80,000 new nurses that we are putting into the NHS without spending more money, I am happy to give way to him.

Michael Howard: I am grateful to the Chancellor for giving way. He has turned to the Government's stock defence whenever anybody points out the failure of their public services, which is the money that they are pouring in. They are pouring a lot of money in, but has he read today's independent report from Bridgewell Securities Ltd? It contains the following two sentences:
	"It is hard for the Government to escape the conclusion that most of the benefit of near-double digit growth in its spending is being lost. This is partly due to rising public sector pay and partly to increasing employment in areas that lead to little or no improvement in public services."
	Do not those two sentences sum up the failure of Government policy on the public services?

Gordon Brown: The shadow Chancellor is trying to rescue the shadow health spokesman, but he cannot answer the question. We are investing in 50,000 more nurses, which will rise to 80,000. We have 10,000 more doctors, which will rise to 25,000. In all the Conservative years, only 11 hospitals worth over £50 million were built. We are now building 110 hospital developments, many of them worth over £50 million. The Conservatives would not be able to afford any of those things. At the last election, they said that they would match us on health service spending. All Conservative Members stood giving that promise. Now they have to go back to their constituents to say that they cannot make the promise that they would have the extra nurses, the extra doctors, the extra equipment and the extra hospitals.
	In that debate, which will run until the general election, the Conservative party has admitted that it wants people to move into private care, that £5,000, £6,000 or £7,000 is what they have to put up to pay for it and that NHS operations costs are half those of the private sector. That is why our reforms of the public sector, matched by the investment that we are putting in, are the right policy for this country.
	In advance of the spending review—I think that there will be all-party support for this—I can tell the House today, as part of the review process that we are undertaking for the next spending review, the terms of reference and the changes that we are making with our cross-cutting reviews.

Eric Forth: More spin.

Gordon Brown: I believe that there will be all-party support for this. All parties are interested in how the voluntary and community sectors operate in this country—it is common ground.
	I want to tell the House that we have set up as part of the spending review a review of how voluntary and community sector organisations can play a fuller role in public service delivery. I am placing in the Vote Office this afternoon the terms of reference for a review of five specific areas, including social care, crime and community cohesion, education and learning, housing and homelessness, and children and families. The review will involve a nationwide consultation, which I thought that all sections of the House would support, with the voluntary sector.
	We are also conducting in advance of our spending review, to secure the very value for money that people have been talking about in this debate, a review of child poverty and the public services of this country that will consider how we can improve the attack on child poverty by improving public services, as well as financial benefits. That will be part of a review that will go hand in hand with a child care review.
	As part of the public spending reviews, there will also be a review of financial support for 16 to 19-year-olds led by the Paymaster General. The House will know that we commissioned some months ago a review of public sector and civil service relocation as well as a review of efficiency. That efficiency review is examining new ways to provide Departments with incentives to provide opportunities for efficiency savings. [Interruption.] I am also publishing today the terms of reference for a review to examine how best to achieve decentralised delivery.

Several hon. Members: rose—

Mr. Deputy Speaker: Order. We should have a major reduction in the amount of sedentary interventions. The House must listen to the Chancellor.

Gordon Brown: Normally, when an announcement is made about a series of reviews taking place in the run-up to a spending review—some of which the Opposition would wish to support, in my view, given what they have said today—an Opposition party would want to welcome what we are doing, instead of shouting from a sedentary position. The fact is that the programme of investment and reform is continuing, and these reviews, as part of the next spending review, show that that will be stepped up over the next year. The shadow Chancellor should support these reviews, because they are about value for money and efficiency going to the heart of public services, including local delivery. The Conservatives have revealed today, through their conduct in this debate, that they have only one target—to cut public spending on the health service and on education—and only one purpose: to move operations, treatment and staff into the private sector. They used to be able to say that the national health service was safe in their hands; it is no longer safe in their hands, and I commend our amendment to the House.

David Laws: I wonder what it tells us about the Chancellor's confidence in the Government's record on public services that he should take the time to come to this House today to respond to an Opposition day debate on public services and Government targets, and in doing so say absolutely nothing about those two issues. All that we have heard from him is a speech three quarters of which was devoted to Conservative health policy, with the remaining couple of minutes given over to a series of reviews that are apparently supposed to address the issues before us some time in the very distant future.
	I can only assume that the Chancellor's speech was so extraordinarily vacuous because he is ashamed of Labour's record on public services and on delivering the public service agreement targets. Perhaps he was so unwilling to give way at the beginning of his speech because he anticipated that we might return to the evidence that he gave to the Treasury Committee last July, when he told us that 87 per cent. of the targets from the 1998 spending review, which were to be delivered in the period to 2002, had been delivered. Yet we now discover that, according to this weekend's edition of The Sunday Times, the Government have misled Parliament about their improvements to public services by overstating the number of targets that they have achieved, according to a memorandum from a Cabinet Minister.
	That Minister proved to be none other than the Chief Secretary to the Treasury, who is responsible for monitoring public service agreements in the first place. [Interruption.] As this vital issue goes to the heart not only of the Government's credibility but the Chancellor's, perhaps he will take this opportunity to intervene on me—instead of gossiping with other Ministers from a sedentary position—and correct this information, which has been put in the public domain, if it is wrong. [Interruption.]

Mr. Deputy Speaker: Order. There are too many private conversations going on in the House. I do think that the House should listen to the hon. Gentleman.

David Laws: Thank you Mr. Deputy Speaker—I quite agree. You were generous to the Chancellor in allowing him to stray on to Tory health policy for three quarters of his speech, and you are right to point out that he needs to respond to the allegation that is being made. The allegation is that this year, the Chief Secretary to the Treasury misled the House by saying that only 13 per cent. of the PSA targets had not been met, and that the Chancellor repeated exactly that claim to the Select Committee last year, when he said that 87 per cent. of the targets had been met. Now we discover that, according to a memorandum to the Public Administration Committee, more than 90 of the 239 key targets set by the Government in 1998 were missed. Perhaps the Chancellor will clarify whether he now wishes to change the estimate that he gave to the Select Committee last year. I am happy to give way to him on that point.

Gordon Brown: indicated dissent.

David Laws: The Chancellor is very good at giving way to other people when he wants them to speak, but he seems a little more reticent in coming forward when we are told that a memorandum to the Public Administration Committee states that the Chief Secretary and the Chancellor have misled the House on the question of the percentage of public service targets that have been met. That is an extraordinary claim, and I hope that any member of the Treasury Committee who is present will take the opportunity at hearings later this year to return to an issue on which the Chancellor is so reticent.
	The Government have been in power for more than six years. On 2 August, they will become the longest-serving Labour Administration of all time. For the first couple of years, it was a passable excuse to say that many problems in the public services resulted from at least two decades of under-investment by preceding Conservative Governments. That excuse is wearing incredibly thin. In less than six years, a previous Prime Minister—Winston Churchill—managed to win a world war, but the present Prime Minister has been unable even to make the trains run on time. Perhaps that was why the Chancellor was so determined to talk about everything other than the Government's record of delivery on public service agreements and public services.
	The Chancellor may hope that he can get away with ignoring those things. He may hope that people have not detected the Government's failure. If recent opinion polls are anything to go by, however, he would be mistaken in hoping that people do not see the failure of the Government's public sector policies. In the most recent published poll, the net improvement balance—that is, those who think that public services have improved versus those who think that they have deteriorated—is minus 16 percentage points in transport and minus 10 percentage points on the national health service. I should be happy to give way to the Chancellor if he thought that I had got that wrong. Even on education, where there was previously a positive balance of 12 points, the poll taken after the chaos in school budgets earlier this year shows minus one percentage point: even on education, people believe that performance has deteriorated. The outcome was exactly the same on policing.
	The debate gives us an opportunity to touch briefly on alternative proposals put to the Government on public services, including some of those put forward by the shadow Chancellor, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), in a variety of areas. The Chancellor spent much too much time covering Conservative policies on health, but I agreed with his basic analysis, which was summed up in an article in The Times on 6 June by a Mr. Green, who said that the Conservatives had had six years to rethink their health policy but the previous day's patient passports announcement had shown that all that they had come up with was another escape route from collectivism for the relatively well-off.
	Problems in the Conservative party's new policies on public services extend not just to health but to education. Only weeks after the Tories announced their intention to abolish tuition fees, there are already divisions in their ranks. According to The Times, the hon. Member for Wantage (Mr. Jackson)—a former Education Minister—last week met the Tory leader and the hon. Member for Ashford (Mr. Green), who is shadow Education Secretary, to ask that the pledge on tuition fees be reconsidered. Apparently, the hon. Gentleman led a delegation of MPs including a former Health Secretary, the right hon. Member for Charnwood (Mr. Dorrell). Critics within the Conservative party are apparently saying that its policy is opportunistic and impossible to implement.
	Since we are dealing today with public service agreements, we also want to know whether—

Stephen O'Brien: The debate is about targets.

David Laws: I am glad that the hon. Gentleman has mentioned targets; we want to know, for example, whether the commitment given on targets in the 2001 Conservative manifesto on the patient's guarantee on maximum waiting times in particular clinical areas is still in place. We should shed some light on that important issue.

Ian Liddell-Grainger: The hon. Gentleman has said a lot about Conservative targets. May I interest him in a target in his own county of Somerset? The local education authority—Liberal Democrat-controlled—has kept back nearly £10.5 million from the county's schools, and Somerset is missing targets. Should he not put his own house in order before he throws stones at other political parties?

David Laws: My Somerset colleague is wrong. Perhaps he is unaware that I had a letter from a Minister at the Department for Education and Skills recently saying that previous claims that the Government had made that Somerset local education authority and others were to blame for the funding problems were inaccurate, and that the problems were caused by the Government. I hope that the hon. Gentleman will welcome that recognition of a funding problem caused by the Government's policies.
	When we consider performance in the public services, we must keep in mind the two issues of funding and of delivering through the public service agreements and the other reforms that the Government are pioneering. It is perhaps not surprising that delivery has been poor so far, because on the first issue, funding, we can see that in the Government's first period in office the record was exactly the same as it was under Mrs. Thatcher. In the period from 1979 to 1990, the increase in total managed expenditure was identical to that in the first period of office of the current Prime Minister. It is therefore not surprising that the legacy of underfunding has continued and been so damaging in areas such as education and health.
	The shadow Chancellor did not set this out today, but it would be interesting to see at some stage whether he would be willing to match the more significant increase in health and education spending that we have had in recent years, and whether he will offer something more than the paltry funding that we had under the Conservatives, including the slowest period of rise in education funding in the whole post-war period.

Geoffrey Clifton-Brown: The hon. Gentleman has spent his entire speech criticising either the Government's missing of targets or Conservative party policies. It seems to me that the Liberals have few policies. Before he finishes, can he tell us one or two basic things? What would the total managed expenditure be if the Liberals ever got anywhere near power over the next three years? What would they do about health spending? Would they match the Government's health spending or exceed it, and if so, by how much?

David Laws: I shall be delighted to answer all those questions, and I apologise for spending so long criticising Conservative and Government policies, but there is so much to criticise, and it is only right to subject their policies to proper scrutiny.
	Year in, year out, since 1998, the Government have been saying that they are about to enter a year of delivery. That year of delivery has never been reached. It is a matter of concern, as the shadow Chancellor said, that the Secretary of State for Trade and Industry now seems to be wondering whether the Government ought to be delivering at all, with her suggestion that it is not as easy in public services as it is in areas such as pizza delivery. It is astonishing that, six years into this Government, when we are about to match the longest term in office of any Labour Administration, the Government are backing away from public service delivery, to the extent that we have had a speech from the Chancellor that was entirely content-free in relation to the issue on the Order Paper. [Interruption.] The Chancellor mutters away, but he is not willing to clarify whether he and the Chief Secretary have misled the House on the targets on PSAs from the 1998 spending review. [Interruption.] I will give way to the Health Secretary if he thinks that he can do better than then Chancellor on that subject.

John Reid: I will do it later.

David Laws: We will listen with interest.
	The figures calculated last year by both the Liberal Democrats and the Conservative research department are now seemingly being confirmed by the Government, in the memorandum that has gone to the Public Administration Committee, about which the Chancellor is so reticent. Those figures show that at least a third, and probably 40 per cent. of the targets set in the first spending review were not met. Many of the targets have now been changed, and some have been deleted, and of course there is that third classification, alluded to by the Chief Secretary on many occasions, of partially met—which to most of us means not met at all.
	Today figures from the Department for Transport—not Liberal Democrat or Conservative figures—revealed by a commission specifically set up to assist the Government to deliver on public services, show that Ministers have been blown off course and are failing on six of the 17 targets set by the Deputy Prime Minister, including the ill-fated target to triple the amount of cycling that was supposed to take place by 2010. We are now told that cycling fell by 17 per cent. in 2001. An excuse from the Department tells us that it is in the nature of transport that it takes a long time for investment to make an impact. Apparently, there will be dips and troughs on the way to meeting the targets. That is yet another partially met target, and we await with interest to discover whether it will ever be met or will be revised away in the meantime.
	Then we had the shambolic evidence given by the Chancellor to the Treasury Select Committee in July last year, which appalled even the Labour members of that Committee. I hope that that will be good reason in time for those Labour members to take up the issue of public service agreements in a separate report. The Chancellor confirmed in his evidence the 87 per cent. figure, which we now know is rubbish. Perhaps the Chancellor anticipated it at the time in using the words
	"What is said is that 87 per cent. of these have been met",
	suggesting that he may have known that the Government's figure was entirely bogus.

Howard Flight: Does the hon. Gentleman believe that the whole targets approach adopted by the Government is practical, given that the private sector gave up on it about 15 years ago because it did not work? It produced distortions, cheating with numbers and all the problems to which my right hon. and learned Friend the shadow Chancellor referred. It would be helpful to know whether Liberal policy is in agreement with that.

David Laws: The hon. Gentleman anticipates my next comments in which I shall pick up on the distortions that the existing targeting regime has caused and argue that we would prefer a much lighter-touch approach in respect of overall targets because micro-management by targets has clearly failed.
	When the targets were first set up, the Chancellor gave the impression, as he began to emerge from the Conservative straitjacket on spending, that in exchange for additional public expenditure there would be incredibly rigorous monitoring of public service agreements and that anyone who failed to perform in relation to public service targets would be penalised in consequence. In fact, the Secretary of State for Work and Pensions said in a press release in November 2000 that there would be
	"a rigorous monitoring process and action will be taken where there is a risk that a Department's performance is off track."
	In other words, a clear impression was given that if Departments failed, there would be a penalty to pay.
	By the time that the Chancellor gave evidence to the Select Committee, that rather formidable and frightening prospect seemed to have receded entirely. It appeared that there was not only no prospect of Departments being penalised, but that Departments would monitor their own performance on public service agreements and report on themselves. In other words, the Treasury's oversight—and the initial impression that it would be involved considerably—seemed to have disappeared altogether. When the Chancellor was asked by hon. Members from different parties whether there would be any penalties if Ministers failed to deliver on public service agreements—in the Home Office, for example, where 11 out of 16 targets had failed at that time—all the Chancellor could say to me was:
	"Are you saying that the conclusion you reach is that no more police are needed?"
	In other words, the sanctions that were going to apply at the beginning of the process seemed to have disappeared entirely out of the window.
	When we pressed the Chancellor further on that matter and asked what would happen if the Home Secretary did not deliver, we were told that no penalties would be applied and that it would be a matter for the Prime Minister and the electorate. In other words, the great system of Treasury control over public service agreements, the monitoring, penalties, rewards for performance and so forth, had all gone completely out of the window, so it was left to the Prime Minister to consider the problem and to the electorate to hold the Government to account. I am sure that the electorate will hold the Government to account when that opportunity arises.

John Bercow: Leaving aside the important debate about whether the Treasury or individual Departments should be the arbiters, does the hon. Gentleman agree that for the Government to fail to meet targets set by independent experts would be disappointing, but that for the Government to fail to meet more than a third of the targets that they have set for themselves requires incompetence on a truly spectacular scale?

David Laws: The hon. Gentleman is right, and that is why we hope that the Chancellor will take the opportunity to intervene to tell us whether the memorandum from the Chief Secretary, which has apparently gone to the Public Administration Committee, is accurate. If it is accurate, and the Government have missed a third of their targets, that is a serious matter, because both the Chancellor and the Chief Secretary may have misled the House.

Ian Liddell-Grainger: As a member of the Public Administration Committee—I think that I am the only one present, because the Committee is sitting at the moment—I can tell the hon. Gentleman that we are still considering that issue. The shadow Chancellor has done much work on how many targets have been missed, but we cannot get the answers.

David Laws: I am grateful to the hon. Gentleman for that insight. I hope that he will continue that probing, because it is very necessary.

Geoffrey Clifton-Brown: Does the hon. Gentleman see a paradox in the Government's approach to local authorities and Departments? The Government make local authorities meet their comprehensive performance assessments and penalise them if they do not, but the Government do not penalise Departments if they do not meet their public service agreement targets. Is not that a case of do as I say, not as I do?

David Laws: The hon. Gentleman is right. If he read the statement made in the spending review 2002 by the Chancellor about which individual public service delivery units would get penalised if anything went wrong, he would notice that Ministers and Departments were noticeably absent. By that time, the idea that Departments could be held accountable had gone out of the window. It was schools, hospitals and local authorities that would be held accountable, not Ministers and Departments.
	The Government's targeting regime has other problems and I hope that the Secretary of State for Health will detach himself from his conversation now, because he may be interested in my points about the health service. Targets in the health service potentially distort performance and priorities in many ways, but one of the issues that must be of concern is the way in which the Government are targeting only the in-patient and out-patient waiting lists. They are not targeting the waiting time from consultant to consultant or the waiting time for diagnostic tests, both of which hon. Members will find raised most often in their post bags and constituency surgeries. In many areas, those waiting times are still more than a year and sometimes more than two years. I welcome the fact that the Government are trying to bring waiting times down, but if we are to make the public service agreement targets meaningful to people, they must apply to all aspects of waiting times, especially to the diagnostic waiting lists, which can be so important for treatment.
	I hope that the Secretary of State for Health will scrutinise the way in which the targets are recorded, and whether they are credible. I have an example from my local area of the ways in which the Government record some of those vital statistics. It was raised with me by a constituent who saw in the local newspaper that the local trust had met the six-month in-patient waiting list target. The trust has done a fantastic amount of work to bring its waiting list down, and that is welcome. However, the individual in question contacted me about cataract surgery, because his experience was at odds with that reported in the local newspaper. He had waited for between six and 12 months to have one of his cataracts treated but, in order to speed through the waiting list for cataract treatment, the other cataract was not done at the same time. After he had had the first cataract treated, he was put on what is called a planned waiting list, which is taken in date order and on which the wait is approximately 12 months. In the health sector, we give indicators that pretend that we are treating people within six months, while, across the country, the actual experience of many people is that they have to wait longer. In commenting on the issue, the hospital said that the regulations about what it counted and did not count were set not by it but by the Department of Health.

John Reid: I do not know about the individual case that the hon. Gentleman raised, but I caution him, as I did Dr. Bogle last week: I have no doubt that, as in any organisation, when there are targets or objectives, people will occasionally try to meet them by means with which we would not agree. The hon. Gentleman should be careful not to add his voice to those who for their own reasons have no sympathy or support for the national health service and want to portray the commonality—

Stephen O'Brien: The right hon. Gentleman wants to gag them.

John Reid: I have no wish to gag any criticism, but I do not want anyone to support the impugning of the integrity, hard work, dedication and professionalism of the vast majority of those who work in the national health service.

David Laws: I was not aware that I was impugning the integrity either of the health service or of people who work in it, and neither was my constituent who raised the issue with me.

John Reid: Will the hon. Gentleman accept that it is neither common nor typical? The vast majority of the 1.3 million people active in the health service are dedicated and committed professionals who would not stoop to means of deceit. That is all he has to say. The constant chorus from the Opposition and one or two of their allies in the media to denigrate and run down the NHS will get no support from the Government Benches.

David Laws: The Secretary of State has been sitting next to the Chancellor for too long. He is using the same tactics of distract and evade as the Chancellor used during his speech. He is trying to take us away from the issue, but I hope that he will take those points seriously.
	I understand that the right hon. Gentleman's predecessor was concerned about those issues, especially in relation to diagnostic tests. If we put such an emphasis on waiting times in the health service, they must be credible and understood by our constituents.

John Reid: I know that it is difficult for the hon. Gentleman, but will he take this third opportunity to say that he does not believe that the practice is common among NHS staff and that the vast majority of them are decent professionals who are wholly committed to what they are doing? It is simple to say; or is he joining the malign attacks by the Opposition on those who work in the NHS?

David Laws: Those are still diversionary tactics. Of course, I am not attacking nurses and doctors—

John Bercow: The hon. Gentleman is attacking Ministers.

David Laws: Indeed I am. I am attacking the Secretary of State, but perhaps I am not doing it clearly enough. A letter from the Somerset trust stated that it abided by the regulations because they were set by the Department of Health. I am not accusing my local NHS trust of fixing or fiddling the figures. The trust is reporting the figures exactly as the Secretary of State suggests it should. The reporting is entirely consistent with what the right hon. Gentleman wants. Nevertheless, the figures are misleading, because a huge number of people are waiting for diagnostic tests and consultant-to-consultant referrals. Perhaps they are on the planned waiting lists, which, of course, were not set up by people at my hospital but by Ministers. I hope that the Secretary of State will look into that, even though he has only recently taken up his position.

Liam Fox: Did the hon. Gentleman hear the remarks of the outgoing chairman of the British Medical Association? He said:
	"You would think . . . that the government would be distancing itself from . . . corrupt and immoral practices . . . Instead, it has turned a blind eye, been triumphalist about its 'achievements' and colluded in deception and doublespeak."
	It is not NHS staff who are to blame; it is not their integrity that is being impugned but that of Ministers. NHS staff are as much victims of this culture as are the patients.

David Laws: The hon. Gentleman is right. I am certainly not suggesting that people who work in the health service are corrupt. They have to respond to the targeting regime and report information precisely in the manner set down, and daily micro-managed, by the Department of Health. If the Secretary of State wants people to believe in the improvement in public services and in the health service, if he wants people to celebrate the reduction in waiting times, which is occurring in some parts of the country, including my area of Somerset and Dorset, and which I very much welcome, we must ensure that the figures reported by the Government are in line with people's actual experience. At the moment, they are not because we are not picking up the diagnostic waiting lists, the consultant waiting times or the planning waiting times.
	Of course there is a whole series of ways in which the present public service targets distort activity and often create priorities that would not be those of the people on the front line. That is the concern, and we see it not only with PSAs, but in many other parts of the public services. We see it in the ear-marked moneys that are handed down by the Chancellor and in his packages that are allocated to capital spending even for schools that have just been rebuilt and have no capital priorities but would like to spend the money on school staff. We see it the class-size limits, which are often welcomed in respect of extra resources, but which may lead to pressures on the ground, so that head teachers are forced into arranging schools in a way that they do not believe is best, as I found in a primary school in my constituency this morning. It is there in the micro-management of chief police constables. When I visited the chief constable of the Avon and Somerset constabulary this year, his own local priorities were being dictated by the Home Secretary, not by the police authority itself.
	In all those ways, the Government are distorting the delivery of public services, and they think that they know better than people on the front line when they do not. Even in those areas where the Government claim to have a new localism, giving greater autonomy to the public services, that autonomy has to be earned. In other words, the Government presume that they should hold on to power and others have to earn it if they are to exercise discretion. Clearly, that is entirely the wrong way around.

Geoffrey Clifton-Brown: Will the hon. Gentleman give way?

David Laws: I will not give way because I have used up far too much time already, although I am grateful to the hon. Gentleman for raising an issue earlier.
	Earned autonomy is not good enough. The presumption must be that, in a regime where reasonable inspection takes place, the front-line deliverers of public services are trusted to deliver, rather than the Government shackling front-line public services with their own constraints and so-called earned autonomy.

Geoffrey Clifton-Brown: On a point of order, Mr. Deputy Speaker. I heard you twice upbraid the Chancellor for criticising Conservative policies. At least we have some policies. I asked the Liberals a few questions about their own policies. The hon. Gentleman has been speaking for more than half an hour. Is it too much to expect that, by the end of his speech, we might hear—

Mr. Deputy Speaker: Order. The hon. Gentleman can safely leave such matters to the Chair.

David Laws: I should be delighted to speak for another half an hour or so to outline Liberal Democrat public services policies. In fact, I suspect that half an hour would not be nearly enough. However, I hope that I have made it clear that we believe, uniquely as a party, not only in the funding that has been absent from this Government's first term and that was so lacking in the Tory party's 20 years in power, but in decentralisation, not the Government's phoney decentralisation—their earned autonomy—not the decentralisation that the Conservative party talked about when in power but did not deliver, but real decentralisation to the front-line delivers of public services. If we can have the additional cash, the reform and the decentralisation, we at least have a chance to deliver the improvements in public services that all of us—at least Liberal Democrat Members—wish to see.

Nigel Beard: It is important to recognise that the motion is not about what proportion of targets has been achieved. It is not about the generality of targets or the number of targets. The motion absolutely condemns targets as a concept. It talks about a regret
	"that the Government have used targets".
	It talks about them diverting
	"time and attention away from the task of improving public services".
	It is a blanket condemnation of targets as a means of centrally controlling or directing public investment.
	As the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) said in response to a question from me earlier in the debate, the motion refers to targets being replaced by
	"professional autonomy, decentralisation, diversity and choice in the public services".
	In other words, it is saying that the money provided by the Government should be handed over—blocks of it—and the public services should be left to get on with it. That may be reasonable, but we need to judge that assertion against the record of the people who are putting it forward, because the Conservative party has a record. We also need to judge the motion in the context of the Government's economic policy as a whole, because the investment programme in public services is a major part of that overall economic policy. That programme and its achievement depend crucially on some kind of direction of the investment to ensure that what is intended is achieved.
	Let me start, therefore, by examining the motion in the context of the record of those proposing it. In 1997, when this Government came to office, there had been 18 years of neglect of public investment, despite the bonanza of North sea oil, which one would have thought could have been the spur to renewing public investment in Britain. Instead, the advantage that that brought was frittered away on tax relief for the better off. While that was being done, health, education and transport were neglected. The hon. Member for Yeovil (Mr. Laws) spoke about the fact that the rail transport targets have not been met. It was not appreciated until the Hatfield rail disaster, however, how disastrous the neglect of investment in railways had been for the railway service, and how disastrous it was to compound that neglect with the folly of rail privatisation. It is therefore not at all surprising that we have a more difficult position now than we anticipated—

Mr. Deputy Speaker: Order. I say to the hon. Member for Newcastle-under-Lyme (Paul Farrelly), who has just walked into the Chamber, that he must not walk directly across the line of sight of the hon. Member speaking and the Chair. I appreciate that he did not realise that, but it is an important point.

Nigel Beard: These things feed off each other. Some of the targets, particularly in transport, have not been met because the consequences of 18 years of neglect had not been fully appreciated.
	At the same time as that neglect of investment, the public finances were left in a dreadful mess, with a £29 billion deficit. By what means was that to be paid off? By a fuel tax that burdened pensioners in particular. The double whammy of 1997 was therefore a neglect of investment and at the same time a Government deeply in the red. It was fecklessness compounded by incompetence. The economic policy that lay behind that was going nowhere. The recession of the 1980s was followed by the recession of the early 1990s, with an interlude of rampant inflation in between. The strategy for the economy was that a country with some of the most capable and ingenious people would compete with the rest of the world on costs. Our future was to out-sweat the sweat shops of Asia. In a perverse way, I suppose that that explains the Conservatives' neglect of state education and the way in which the universities were allowed to decline so disastrously. Against that background of instability and, at the same time, a lack of confidence in Government competence, lay a lack of confidence in business, not surprisingly, and businesses did not invest.
	Let us contrast that position and put it as the background to this motion. It is not a record that instils great confidence in the sense of the motion, but let us give the Conservatives the benefit of the doubt for the moment. Let us also examine it, however, in the context of Government policy, and contrast that with the scene of neglect and economic failure that I have been outlining.
	First, priority was given to education and to redeeming a lost generation who had been on the dole for far too long through exercises such as the new deal. That was a declaration that this country's economic future depended on mobilising our skills and abilities, on the higher value that they could create and on competing with the rest of the world through our ingenuity and abilities.
	The second main point of the strategy was a recognition that social justice and economic growth were not opposed and that it was not a case of choosing one or the other—they go hand in hand. It was not accepted that we could wait for a magic day when the economy would be right and then start to invest in the health service, education and transport, and put things right in sequence. Public finance and economic management had to be put on an entirely different foundation, and public service agreements form part of that general structure. A restraint on spending for two years to help to put the public finances right—

Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman again, but he has made some general financial remarks and I trust that he will now relate them to Government targets.

Nigel Beard: Indeed, Mr. Deputy Speaker. I am attempting to outline the broad structure of Government policy in which public service agreements and, therefore, targets fit. PSAs form a major part of the Government's programme of investment by ensuring that the investment achieves what people voted for and wanted.
	The other big rules in the strategy were the independence of the Bank of England and a target of 2.5 per cent. inflation—I wonder whether that will be condemned with all the others—with the rate kept within 1 per cent. above or below. Do Conservative Members want that to go out with all the other targets so that there would there be total devolution to the Bank of England with no further intervention from the Chancellor?
	The fiscal rules are part of the general complex. There is a golden rule of ensuring that borrowing occurs only for investment so that we do not return to the previous Government's policies of live now, pay later. The sustainability rule ensures that we do not run up debts and leave them to be paid in the future.

David Taylor: I endorse my hon. Friend's point about the sustainability of the repayment of public debt and agree that we should not pass on debt to future generations. However, given the broadening and expanding use of the private finance initiative, is there not a risk that we are doing exactly that? We are requiring later generations to pay for the investment from which others will benefit.

Nigel Beard: The reverse is true, and I think that my hon. Friend has misunderstood the nature of payments under the private finance initiative. Under the PFI, the public sector pays year by year as services are used. Consequently, the services gained in one year are paid for in that year. Whatever sins one might adduce to the PFI, burdening people in the future cannot be one.

John Bercow: I am grateful to the hon. Gentleman for giving way because he is a loyal Government workhorse. Surely one of the central political questions behind the debate is whether the measurement of public service agreement targets is so flawed as to undermine the integrity of the targets themselves. In that context, does he think it right that if a PSA target has five components and the Government miss four, Ministers are justified in recording the target as being "partially met"?

Nigel Beard: I shall talk about what is amiss about the targets in a moment. I tell the hon. Gentleman that the questions of whether we have quantified the targets that have been adopted sufficiently well and whether that quantification has been adequately measured are the subject of a different debate. If we accept targets, we may consider the way in which they are properly implemented. If he is saying that several of them are difficult to measure or are bound to be subject to judgment, I go along with him entirely. However, that is not the motion before the House. It says that we should not have targets at all. It seems that the targets, which are somehow flawed, should be swept away and everything should be devolved. If he wants to stick to the line that he took, I suggest he thinks about voting against the motion.

David Laws: Where in the motion does it say that there should be no targets at all?

Nigel Beard: The last few lines state that the House
	"regrets that the Government has used targets as a substitute for real reform; and calls on the Government to embrace the principles of professional autonomy, decentralisation, diversity and choice".
	I am not against any of those things, but if we use them to replace targets, there is no means by which we can influence how money is invested.

David Laws: The hon. Gentleman's comments clarify that the motion does not specify that there should be no public service targets at all. It could mean—this is for the Conservative spokesman to clarify—a much smaller number of key targets without the same amount of micro-management. Does he agree?

Nigel Beard: I do not. The words speak for themselves. The motion says:
	"regrets that the Government has used targets".
	It is quite simple.

John Bercow: I welcome the hon. Gentleman's belated concession of defeat to the hon. Member for Yeovil (Mr. Laws). For the purpose of clarification and the avoidance of doubt, I put it to him that the central problem in the Government's position is that when important targets have been set that should have been met, they have not been, and that when they have met a target, it is of the vacuous character, "We will publish a White Paper", which does not represent the apogee of political achievement.

Nigel Beard: The hon. Gentleman is adept at making generalised condemnations. I shall give way again if he gives me two examples to support his argument.

John Bercow: I am very happy to do that. It is overly generous of the hon. Gentleman to give me such an opportunity and a bit uncharitable of me to exploit it, but I appreciate it none the less. A good example is the failure to meet the truancy target, followed speedily by the decision to abolish it. I should like to adumbrate the argument, but I fear that I would fall foul of you if I did, Mr. Deputy Speaker.

Nigel Beard: I shall not respond directly to the hon. Gentleman because I am about to address the application of targets and their value if they are not met. Plainly, they are not always met, but they are, nevertheless, of value to the administration of large investment projects.

Paul Farrelly: Does my hon. Friend agree that one great benefit of our targets is that they are, at least, made public? Does he remember when the Conservative Administration in the 1980s set targets in secret for the pound against the Deutschmark? We all know where that led.

Nigel Beard: In terms of the motion, the Conservative party's record on economic management would have meant us debating the abolition of long division because its Government were incapable of basic arithmetic, let alone anything complicated. However, I shall deal with the points raised by the hon. Member for Buckingham (Mr. Bercow) in the context of my other remarks.
	Having succeeded so well in our economic performance and in providing the money that is vital to regenerate our public services, it is essential that we ensure that the money is spent to best effect. In a nutshell, that is what public service agreements are about. They do not mean putting money into an organisation and hoping for the best, which would be the effect of the motion. Those long-neglected services need not only investment, but modernisation and reform. Although investment is a major issue, the thinking behind the services, the style of service provided and their procedures have not been modernised in the past 18 years. If we are to meet the demands of people in the 21st century for personal and much more immediate service, investment in, and reform of, public services must go hand in hand. Public service agreements are the means of ensuring that.
	The targets that we set enable us to monitor carefully whether investment and reform are being achieved. There will be cases in which those aims are not being achieved, and year-by-year monitoring is the means by which attention is called to those cases so that remedial action can be taken. That ensures that we do not wait five or 10 years before we see that the ultimate target has not been met and then wring our hands.
	Targets provide a means of making corrections as we go along, year by year. [Laughter.] I am surprised that the hon. Member for Eddisbury (Mr. O'Brien) finds that so amusing. Is he suggesting that, once launched, any of those programmes should be left on autopilot with no one looking at them again? If they were left on autopilot, against what would we judge them if we did not have some idea of where we were going? If, by monitoring performance against a target, we find that the target is exaggerated or too optimistic, we adjust it. I shall tell the hon. Gentleman a secret: every private company in this country that is engaged in major investment runs its programme in that way.

David Taylor: Is it not in the interests of the Conservative party, which, in its heart, does not believe in the concept of high-quality, wide-ranging public services, to remove performance indicators from those services, so that the party's success or failure can be judged by journalists who write the editorial column in that esteemed organ, the Daily Mail, and who successfully employ the broad-brush, condemnatory style that the hon. Member for Buckingham (Mr. Bercow) has made almost his own in the House?

Nigel Beard: There is a great deal of truth in what my hon. Friend says.

Stephen O'Brien: I am grateful to the hon. Gentleman for giving way in his increasingly long speech on an Opposition motion. Having already been trounced in his attempt to suggest that the motion proposes the complete scrapping of targets—those words do not appear on the Order Paper—does he now recognise that the Opposition's objection to his statement that all targets need to be corrected is that, because of the Government's abject failure in the delivery of public service targets, corrections occur only when they scrap them or revise them downwards, against the interests of our constituents?

Nigel Beard: I shall come in a moment to the question of there being too many targets in the beginning. I want first to say a little more on the justification for the general idea of public service agreements.
	After 18 years in which the civil service and public agencies had become used to a culture of contraction, in which their projects were constantly thwarted because those started during the boom were cancelled or reduced during the bust, there was no reception of the idea that public services should be expanding. Those who were responsible for carrying out programmes needed an indication of what they were expected to achieve. They could not reasonably be expected to float in a vacuum, with the Government saying, "Here's the money to improve hospitals," and leaving them to work out how to do that. Targets gave those people some direction, and that was the second purpose of targets.
	Public service agreements do not arise from the Chancellor or the Treasury dictating what is to be achieved by schools or hospitals but from a discussion between the Treasury and the Department concerned. The latter has connections with the professions and organisations that will be the implementing authorities. The idea, which is constantly put about, that a public service agreement is an imposition by the centre, made for financial reasons, is false. Targets that are not met were previously agreed, not set by some grey eminence in the Treasury.
	Targets are not simply a matter of being able to tell when we have got where we want to be; they allow us to see whether we are moving off the track that we ought to be on, and of taking remedial action if necessary. They are the only means of controlling major strategic programmes. It is unbelievable that we could be arguing about that point. Targets are the only insurance that what the Government are spending on health and education will result in the performance that the public need and expect.
	I accept that in the beginning there were far too many targets—some 160—and that they were somewhat general and difficult to judge. However, that was the first step towards bringing in a system in which public investment could be controlled in the way that I am talking about. The previous Conservative Government had no such system. Conservative Members are hardly warranted in talking about the discrediting of the system. The system that was discredited is the one in which there was no attempt to control public investment at all.
	The motion talks about the PSAs being deeply flawed, but they go hand in hand with targets. The motion says that they stifle local initiative, diminish professional responsibility and divert time from the task of improving public services. I do not believe that for a moment. If one looks at the targets, as opposed to generalising about them, one finds that they are very broad. They leave ample scope for individual teachers and doctors, and indeed hospital administrators, to make judgments. They give a broad guideline and say what the priorities should be. Why should they not do that? The general purpose of the Department of Health is to provide the overall picture. If there are no targets, the overall picture is not represented in the decisions made on the ground.
	What targets do not do is leave scope for obstructing reform. The programme of modernisation and renewal cannot possibly allow for obstruction, but there would be obstruction at every turn if nobody were watching and monitoring progress. The Opposition have lined up behind the idea that the old ways are the best. That is what the debate is all about. They want no change. They think that things were perfectly all right as they were.
	The Opposition say that PSAs are deeply flawed, but, as I have said, no major company would dream of advancing on an investment programme 1 per cent. of the size of the Government's investment without putting in place a scheme such as this. It is time that the Opposition came not only into the 21st century, but into the 20th century. They are not acquainted with modern management techniques. It seems to me, from the speeches and interventions that we have heard, that they are a party of voyeurs. They have never disciplined themselves by determining what needs to be done to get things done, and that is essentially what PSAs and targets are all about.

David Taylor: They have never had a proper job.

Nigel Beard: They toil not and neither do they spin, and they do not understand the disciplines of doing either. It is unbelievable that in the 21st century we have a motion against the very concept of a target as a means of managing major projects. I am sure that before long we will be having a debate on the need to abolish long division and double entry book-keeping, because PSAs and targets are as fundamental to managing major projects as long division and book-keeping are to arithmetic and accountancy.

Paul Farrelly: Does my hon. Friend agree that a party that does not believe in public services does not need any targets, because it wants to privatise the lot? We saw what happened with Railtrack, which lost control of all its operations. We are trying to claw back investment, which needs to be carefully measured for improvement in future.

Nigel Beard: I agree. The reason that the Opposition can be so cavalier with the basic concepts of managing major projects is that they have no intention of managing a major investment project in the public sector again. That is what their policy implies, so they can indulge in these games.
	The motion demonstrates that the Tories cannot be trusted with public finance, the economy or public spending—in short, they are not much good with money. The PSA targets are an essential measure to ensure that public investment achieves what is intended and what people outside want.

Nick Gibb: I do not intend to comment on any of the spurious remarks made by the hon. Member for Bexleyheath and Crayford (Mr. Beard) in a half-hour speech that said very little and therefore requires no response.
	There is nothing wrong with targets per se. They are a useful measure of the success or failure of management or of a policy. Problems arise, though, when the targets are the policy itself—when the targets are the levers of management, instead of just a measure of the success or effectiveness of a policy. Targets have become, in many instances, a substitute for policy. Foist on an NHS manager a target to reduce waiting lists on pain of the sack and, hey-presto, he will reduce waiting lists, but will do so by distorting other health priorities. It is rather like changing the dial on a thermometer. Moving the pointer up will not change the temperature of the room. To warm a room, one must turn on the central heating.
	People argue that targets are a symptom of an over-centralised governmental system interfering in local management and delivery. I believe the opposite is true. It is a symptom of accountability and decision-making power being too decentralised and diffuse, with little management power vested with the Secretary of State, to such an extent that, almost in desperation, his or her only recourse is to targets, inspectorates and increasing volumes of guidelines.
	No properly run large organisation in the private sector or successfully run state operations are managed in such a way. What the three key failing public services have in common—health, education and the fight against crime—is that the organisations have diffuse accountability. The NHS is made up of more than 600 separate organisations, each with its own board, chief executive and chairman. More than 130 local education authorities manage education, and the police are accountable to county or unitary authority police committees. It is clear that, despite Herculean determination on the Government's part, these public services are still failing.
	Let us take one example, education. Twenty-three per cent. of adults in Britain cannot read properly. That is one of the worst adult literacy rates in the developed world. It compares with just 7 per cent. in Sweden. Children from poorer backgrounds too often go to secondary school with a reading age two years below their chronological age. Twenty-three per cent. of adults in Britain cannot add 50 and two to make 52. The hon. Member for Bexleyheath and Crayford mentioned long division, but a quarter of adults in Britain cannot even add two basic whole numbers.
	Those figures come from a recent National Audit Office report comparing international education statistics. They are 1997 figures, but those are the latest available.

David Taylor: The hon. Gentleman is obviously very numerate. Will he assess the proportion of the 23 per cent. of fundamentally innumerate or illiterate adults who received their entire education under the 1997 to 2003 Labour Government?

Nick Gibb: I am not making party political points in this debate. It is a sad indictment of the last Conservative Government that when we left office 49 per cent. of 11-year-olds did not reach an acceptable level in reading, but there has been no real improvement since the 1997 election. Standard Assessment Tests tests show that 75 per cent. of 11-year-olds now reach an acceptable level in reading, but that is still way below the target level of 83 per cent. and still means that one in four 11-year-olds go to secondary school unable to read properly. There is also real doubt about the validity of that figure of 75 per cent.
	Professor Tymms of Durham university has conducted his own tests, taken by 5,000 year 6 children in the same 122 primary schools every year since 1997. They show no improvement in reading ability. To quote Professor Tymms:
	"The children are getting no better. It's just that our staff are better at teaching to the test."
	The social exclusion unit has warned that the Government have achieved little in bridging the huge gap in educational achievement, especially among males from unskilled backgrounds.
	The question is why are we doing so badly in this country in teaching our children to read. In Switzerland, it takes six months to teach a child to read, compared with between two and three years in Britain, according to a study by Professor Prais of the National Institute of Economic and Social Research. The question that we should be asking in the House is why. The answer seems to be that in Switzerland children are taught to read using a system called synthetic phonics, learning the sounds of letters and putting together those sounds to make a word—for example, C-A-T. In Britian we use a combination of "look and say" and analytical phonics. Children are taught to look at the shape of a word—"elephant", for instance—and to memorise that shape.
	In a study by St. Andrews university in co-operation with Clackmannanshire education authority, about a dozen first-year primary classes in which a synthetic phonics approach to reading was used were compared with classes using various conventional British methods. Taken as a whole, the comparison showed that pupils taught using synthetic phonics learned about twice as rapidly as those on conventional analytic "look and say" approaches. The proportion of underachieving pupils was approximately halved.
	Conor Ryan, a Labour former special education adviser, agrees and takes the view that now is "an excellent opportunity"
	for the Government
	"to move from neutral toleration"
	of synthetic phonics
	"to more active encouragement of more intensive synthetic phonics at the initial stages of children's reading lessons."
	Of course, that has not happened, so improvements in reading, to the extent that there have been any, have, as Conor Ryan says, stalled.

John Bercow: For the benefit of the hon. Member for North-West Leicestershire (David Taylor), would my hon. Friend confirm that he is not blaming a particular Government, but rather the system advocated by Kimberley, Meek and Miller, who are, to their eternal discredit as teachers of reading, on the record as saying that within the psychosemiotic framework, the shared reading lesson is viewed as an ideological construct where events are played out and children must learn to position themselves in three interlocking contexts? What nonsense.

Nick Gibb: My hon. Friend is right. It is such nonsense and the prevailing—almost exclusive—view of education academics that is the problem that Members on both sides of the House, and Ministers in particular, should be addressing.
	On secondary education, the Government like to cite the PISA—programme for international student assessment—international study, which shows Britain's literacy and maths levels among 15-year-olds as seventh and eighth among countries in the Organisation for Economic Co-operation and Development, but that starkly contradicts other, more authoritative and established international comparisons, such as the third international maths and science survey, which shows Britain at a poor 20th out of 41 countries.

Nigel Beard: Will the hon. Gentleman give way?

Nick Gibb: I will not. The hon. Gentleman spoke for long enough.
	The PISA study was based on tests that—I quote from PISA—
	"assessed young people's capacity to use their knowledge and skills in order to meet real life challenges".
	In other words, they were common-sense tests—IQ tests—so it is not surprising that British children do well in them. They were not tests based on knowledge of the school curriculum, which was the basis of questions in other surveys, such as the one that I cited, the third international maths and science survey.
	Again, the question is why are we failing so badly in this country at secondary level. The Labour party understood only too well in the run-up to the 1997 election that education was failing and that it was Labour's No. 1, 2 and 3 priority. Labour also understood very well one of the key causes of the failure at secondary level. The 1997 Labour manifesto stated:
	"We must modernise comprehensive schools. Children are not all of the same ability, nor do they learn at the same speed. That means 'setting' children in classes to maximise progress, for the benefit of high-fliers and slow learners alike."
	That commitment was repeated in the 1997 White Paper, "Excellence in Schools". It is odd, then, that six years later, only 26 per cent. of lessons in year 7 are setted, 39 per cent. in year 8, 45 per cent. in year 9, 39 per cent. in year 10 and 44 per cent. in year 11. Overall, only 38 per cent. of lessons in comprehensive schools are subject to setting. In other words, 62 per cent. of lessons in comprehensive schools take place in mixed-ability classes.
	Despite a clear commitment to reduce the amount of mixed-ability teaching, no such reduction has taken place in the past six years. There is a keen debate among education academics in the US, and to some extent in the UK, about the efficacy of setting. It is an ideologically driven debate in which the key protagonists are J. E. Slavin, who vehemently opposes setting on the grounds that it is inegalitarian and undemocratic, and J. A. Kulik, who argues that setting children in accordance with their ability in a particular subject and tailoring the course content to each ability level will produce significant gains at the upper level and modest gains at the middle level, while those at the bottom level will see no improvement, but no decline either.

Stephen O'Brien: Will my hon. Friend give way?

Nick Gibb: If my hon. Friend will forgive me, I wish to continue my argument, as other hon. Members wish to speak.
	Moving slow-learning children out of mixed-ability classes does not reduce achievement at the lower levels, but leads to significantly rising standards at other levels. There is also clear evidence that the self-esteem of low-achieving children rises with setting. My view is that setting means that extra resources, including smaller classes or better teachers, for example, can be targeted at the low-ability sets, with a view to raising achievement at all ability levels. That may sound technical and managerial, to use the Prime Minister's words, but it is not. It goes to the very root of the causes of failure in our state education system. The reason we have so much mixed-ability teaching is in many ways ideological rather than merely technical.
	I urge Labour Members who are genuinely interested in improving our education system to read the study by Tom Loveless entitled "The Tracking and Ability Grouping Debate". The evidence is overwhelming that setting works, delivers higher standards and is beneficial to children from lower socio-economic groups and ethnic minorities, but it involves eradicating mixed-ability classes in our comprehensive schools. That presents a dilemma for people on the left, including many Labour Members. If we accept the research evidence showing that setting raises standards significantly, especially among able children from poorer backgrounds, we must ask which is more important: the social egalitarianism of including children of all abilities in one classroom or the genuine social equality that is a consequence of the high educational standards—

David Taylor: On a point of order, Mr. Deputy Speaker. The hon. Gentleman is making a very learned and interesting speech, but I find difficult to see how it relates to the motion on the Order Paper.

Mr. Deputy Speaker: The motion and amendment on the Order Paper cover fairly wide ground and I have not so far heard anything that is out of order. I appeal to the hon. Gentleman to remember that time is short enough without points of order of that nature being raised.

Nick Gibb: The choice is between the social egalitarianism of mixed-ability classes or the genuine social equality that is a consequence of the high educational standards in state education that result from splitting up children into classes according to their ability in each subject. Education is one of the key Government targets—this may assuage the criticism of the hon. Member for North-West Leicestershire (David Taylor)—and the key to social mobility and opportunity, and it is paramount in eradicating poverty.
	If Labour Members are serious about equality, they will join me in urging the Secretary of State to do more to insist on the synthetic phonics method of teaching children to read in primary schools and on eradicating mixed-ability classes in our comprehensive schools.

George Mudie: I am sorry that the previous speech was interrupted by a point of order, as I thought that it was a very good and interesting speech, although I also thought that it demonstrated why there is an argument for targets.
	Targets can go wrong and they are a new thing that may need refinement, finessing and so on, but I speak as someone who served in a local authority for a number of years and each year handed a budget to education, which was the biggest spender locally. The education authority took the money and that was the last time that it discussed its budget with us. The comments of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) highlighted one of the reasons why I think that my right hon. Friend the Chancellor of the Exchequer is right not to hand over money to spending Departments and then retreat from the field. He is right to stand in the field and say, "This is taxpayers' money, it has been raised for a purpose and we are going to agree between us what you will spend it on and try to ensure that you spend it efficiently, effectively and in the areas that we as a Government and House of Commons agree to be important."

John Horam: Does the hon. Gentleman recognise that there is a difference between proper accountability for taxpayers' money and good management? It is the second point that we are concerned about.

George Mudie: I am not sure whether the Opposition favour that argument. When one looks at their alternative to targets, one sees that it is not to have no targets or to finesse the existing ones. In the light of the first part of the motion, which speaks of doing away with targets and, instead, having professional autonomy, does the hon. Gentleman genuinely feel that it is right to hand over large amounts of public money?
	I return to my point about the speech of the hon. Member for Bognor Regis and Littlehampton. As laymen, we work for money and hand it over to the Government. Clearly, he agrees that we hand it over to, professionals who take no notice of us or of what we would like to achieve and spend it in a way that they feel professionally, brooks no interference. It is welcome that we have a Chancellor and a Government who tell what the hon. Gentleman described as the three failing services—health, police and education—that they must achieve certain things.
	Of course, there may be difficulties. I confess that, as the hon. Member for Yeovil (Mr. Laws) will know, I was the culprit in the Select Committee on the Treasury who ambushed the Chancellor with targets when he appeared before us in relation to the spending review. The most memorable target was that of the Foreign Office to maintain world peace, although it contains some of the difficulties that arise without targets. It is very sensible for the Treasury to reach agreements with spending Departments on what we as a Parliament and a Government expect Departments to get out of the vast sums that they are given.

David Laws: The hon. Gentleman is developing an interesting speech. He is right to say that I noticed his ambush of the Chancellor last year in respect of the spending review. In that exchange with the Chancellor, he mentioned that there were a number of flaws in the existing public service agreement regime. Will he explore some of those flaws and how they might be tackled?

George Mudie: I do not have much time and I am not sure where this speech is going. I might take that route, but other hon. Members wish to speak and we have little time.
	I was speaking about the Treasury Committee and foreign affairs, but the hon. Gentleman has taken me entirely away from my argument. In terms of targets, I think that I heard my hon. Friend the Member for Weaver Vale (Mr. Hall), who is sitting in front of me, mutter a word that puts the matter into some context—"ambition". As a taxpayer and citizen, I want a Government to have ambitions. I cannot fault them if they fall short of those ambitions, as long as they have tried and done everything to achieve them. The hon. Member for Yeovil was not in the House when the Conservative party was in government. When we attacked that Government and asked what they were going to do, their answer to every problem in the three failing areas that have been mentioned—the greatest problem was unemployment—was to shrug their shoulders and give the stock reply: "We'll still get elected in five years' time."
	They occupied these Benches for the status, the red boxes and the fame; with a few exceptions, they had no ambition for the ordinary people of this country. That was the most unacceptable aspect of their term in office.
	Much as targets are open to criticism—I would say the same about reform—they represent ambition. At least this Government have an ambition. If that is translated into targets that we sometimes do not reach, I can live with that. For example, when did a Conservative Chancellor of the Exchequer ever set a target for the abolition of child poverty? I cannot remember any of them ever mentioning it. They never had such a target or ambition. Poverty was about my class: they were a different class. We, by contrast, have a target. When the hon. Member for Yeovil heard me chase up the Chancellor about the subject, it was the target that enabled me to do it, because he had put his ambition on the table and said, "I will tell you the year when I expect child poverty to disappear from this country; and I will tell you, in stages, the point that I have reached." The hon. Member for Yeovil and my hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard) were able to push the Chancellor and to make sure that he understood how important it was that he should meet his ambition to abolish child poverty. Then, as he moved on from the first milestone, we were able to say to him, "You should do this, this and this." If we did not have a target, an ambition and a statement, where would we be?

Liam Fox: rose—

John Bercow: Will the hon. Gentleman give way?

George Mudie: No, because someone even greater than the hon. Gentleman wishes to speak: the hon. Member for Woodspring (Dr. Fox).

Liam Fox: Does the hon. Gentleman accept that there is a world of difference between aspiration—which he rightly mentions, and which all Governments need to have—and the process by which front-line services are micro-managed from Whitehall through the use of targets?

George Mudie: I accept that it is a learning process. Sometimes, the fault lies partly with spending Departments, which reach public service agreements with the Treasury. I am sure that if the hon. Member for Woodspring sat on the Government Front Bench, he would say, having agreed with the Chancellor that the targets were fine, "I would like to be left alone to put them into operation and, as Secretary of State, to have the opportunity to make the changes that I want." I see nothing wrong with that. Although targets are a good development—

John Bercow: Will the hon. Gentleman give way?

George Mudie: When I have finished my sentence, I will sit down. The targets need to be finessed and changed as we jointly gain more experience.

Mr. Deputy Speaker: I call Mr. Richard Bacon. [Interruption.] Order. I may have misunderstood the hon. Member for Leeds, East (Mr. Mudie). He said that he was going to sit down, not that he was going to give way.

George Mudie: I am sorry, Mr. Deputy Speaker. I meant that I was going to sit down to allow that very important Member, the hon. Member for Buckingham (Mr. Bercow), to intervene, but I fear that he may have tricked me, and I am sure that you would not want to be party to that.

Mr. Deputy Speaker: In future, less ambiguous language would be helpful.

John Bercow: I am extraordinarily grateful to the hon. Gentleman, who, in his typically understated and kindly way, wishes the Labour Government to transmute contracts to promises and targets to ambitions. Why have the Government's targets on slashing the number of deaths from strokes and on reducing by half the incidence of prescription charge evasion—perfectly laudable targets—simply been dropped?

George Mudie: I am sure that the Secretary of State will be able to deal with that more easily than a layman who has little experience in such finer points of the health service.
	Thank you, Mr. Deputy Speaker, for pulling me up on my ambiguous language. It is the first time in my life that I have been accused of ambiguity.
	The Government, by setting targets and saying, "We are going to go through this painful business of reform", are making a rod for their own back. However much we muck about here debating the finer points of the meaning of the word "targets", the British people are interested in the ambitions and delivery of a Government who came in promising to make things better: that is what people want to see. If the Opposition's judgment is that the Government have not achieved all their ambitions, I should like—but will not, in deference to other speakers—to go through in detail each of the three areas that the hon. Member for Bognor Regis and Littlehampton mentioned. I should like to speak about the 50,000 additional nurses. If someone asks, "What's the difference between the two parties?", 50,000 trained nurses will say, "The Labour Government gave me a job." There are 10,000 additional doctors and 1,500 additional GPs. I think that that is right. I am trying to read my own writing and having some difficulty; I should have been a doctor. There are 300,000 more operations each year. Waiting lists are below 1 million for the first time in decades. The hon. Member for Tiverton and Honiton (Mrs. Browning), who intervened on the Chancellor to ask about cancer, is not here. I wonder how she could look at herself in the mirror and defend that intervention, given these figures: under the last Government, 63 per cent. of cancer patients saw a consultant within two weeks; now, 98 per cent. do so. The Chancellor was told, "That is only a figure; there is nothing really happening out there." People should come to my city of Leeds, where in the next few months a £400 million cancer block will be under way at St. James's university hospital. One can see the reality of ambition and targets delivering, as opposed to the Opposition's lack of ambition and targets.
	I turn to education. There are 25,000 more teachers. I attended a meeting in Leeds where the chief executive of Education Leeds, which is not a body that I support or wanted in my city, spoke to parents and pointed out that capital expenditure in Leeds has gone up by 10 times since the time of the previous Government. That is an amazing figure, and it was given not by a politician, but by a chief executive. That shows the advantages of ambition. As well as 25,000 more teachers, there are 122,000 teaching assistants.
	I conclude with reference to the Government's ambition on unemployment. I have one of the poorer constituencies. When we came in, we raised money, against the wishes of the Opposition, from the windfall tax on the privatised public utilities. We spent it on reaching parts of Britain, such as my constituency, that had been ignored for 18 years. The unemployment rate in my constituency went down by 50 per cent. in four years. We halved unemployment in east Leeds, and we have continued to work away at it as the years have passed. For targets, read ambition. I am very grateful to the Chancellor, who is interested not only in money, but in social policy and in converting valuable taxpayers' money into helping ordinary people to raise their families with a decent standard of living.

Richard Bacon: I, too, am interested in money. The Chancellor spent most of his speech boasting about it, as did the hon. Member for Leeds, East (Mr. Mudie). In the health service, much money is wasted: approximately £1 billion to £3 billion on fraud and theft; approximately £2 billion through bed blocking and late cancelled operations; approximately £2 billion through staff sicknesses and absences; approximately £1 billion through infections that are caught while in hospital; between £300 million and £600 million on over-prescribing drugs; approximately £400 million through clinical negligence, and approximately £230 million on treating patients who become malnourished while they are in hospital. That is a total of some £9 billion, which means that between 16 per cent. and 20 per cent. of the NHS budget is wasted. Those are Department of Health figures.

Eric Martlew: Will the hon. Gentleman give way?

Richard Bacon: No, I do not have time. Before examining and boasting about extra expenditure, we should discuss serious, proper financial management of it. The Government are good at playing fast and loose with taxpayers' money. I recently came across an example of a farmer who succeeded in claiming two different subsidies under the arable area payments scheme and the fibre flax scheme for the same piece of land. He also claimed for territories which, on closer inspection, when people could be bothered to examine the grid references that he had supplied, turned out to be in the North sea between Scotland and Denmark and on the mainland of Greenland and Iceland. Basic management, not targets, is what is needed to deal with that.The reason why £4 billion-worth of Apache helicopters are sitting in a shed on Salisbury plain is not targets but sheer mismanagement and forgetting to train the pilots in time.
	We have a chief executive in the health service who was sacked and paid £149,000 in compensation. Most of the payment was found to be ultra vires and it should have been possible to reclaim it, but the six-year time limit had elapsed and it could not be claimed back. The individual was subsequently hired elsewhere in the NHS and later summoned to an industrial tribunal to answer allegations of sexual harassment. He did not turn up and was therefore sacked. However, as any lawyer would tell us, it is unlawful to sack someone for not turning up to an industrial tribunal, so the individual received a further £195,000 in compensation. We do not need targets, but basic management.
	A classic example of poor application of targets and its consequences is education. Let us consider the halcyon days of 2001–02, when the Department for Education and Skills underspent its budget by £1.7 billion and £6 billion was underspent throughout the public sector. It is a shame that the Economic Secretary is not present because he was the Minister with responsibility for adult skills at the time of individual learning accounts, which were a model of how not to do something and showed why targets by themselves do not work. The cost was £300 million. Much, possibly even most—the Department cannot say—was wasted. Seventy civil servants are spending two years trying to sort out the mess, which was caused by targets.
	In a unanimous report, the Select Committee on Education and Skills stated:
	"It should have been possible to design a scheme to encourage new providers that was not wide open to abuse by unscrupulous people posing as learning providers, but the lack of quality assurance made it almost inevitable that it would be abused."
	Subsequently, the Public Accounts Committee examined the individual learning accounts scheme. Its report stated:
	"In the absence of quality assurance, the decision to give a positive incentive to providers to recruit learners was fundamentally flawed."
	In other words, the fraudsters envisaged easy pickings and came steaming in. The PAC report continued:
	"Because of ineffective monitoring, the Department was not aware of unusual patterns of activity, including very large payments to individual providers".
	The permanent secretary to the Department, Mr. David Normington, said that the large amount of activity on the individual learning accounts scheme was taken as a sign of success. The Department budgeted £199 million for two years, but it was spending three times that rate: £25 million a month, which is a total of £600 million over two years. It did not realise that it in spending that money it was being diddled and defrauded. It believed that it was a sign of success. There was no control of cash. In evidence to the Education and Skills Committee, the Economic Secretary, who was formerly responsible for adult skills, said:
	"At the moment because of the uncertain number of individual learning account discount payments we are going to have to pay we simply cannot give you a sense, even a ballpark I regret to say, of what the possible overspends are going to be."
	There was a complete lack of financial control, yet the Chancellor had the gall to boast about spending extra money.
	How did the Government get into such a mess? They were genuinely interested not in quality but in quantity—never mind the quality, feel the width. The Government had a manifesto target to include 1 million people in their programme. As the Education and Skills Committee said of the individual learning accounts scheme:
	"Presented with a manifesto commitment, and a single target of one million users, insufficient attention was given both to the reasons for the previous rejection of an ILA scheme and to ensuring that quantity was balanced by quality."
	That is a perfect example of too much emphasis on targets and not enough on information for users of public services.
	In the health service, we need to enable people to understand what goes on in hospitals and what happens to waiting lists and mortality rates, and let them make the decisions. In schools, we need to enable people to understand what is happening with class sizes, exam results and university entrance performance and let them choose. Dare I say it, parents should be given the money to enable them to make the decisions. What we need to do is to diminish the emphasis on targets and increase the emphasis on choice.

Liam Fox: This has been a short but informative debate. The contributions of my hon. Friends the Members for Bognor Regis and Littlehampton (Mr. Gibb) and for South Norfolk (Mr. Bacon) were especially informative. My hon. Friend the Member for Bognor Regis and Littlehampton made an interesting, thoughtful and informed speech. Perhaps it was the most thoughtful speech of the day; it gave hon. Members much to ponder. My hon. Friend the Member for South Norfolk had a productive seven minutes. He managed to make many points about the way in which money without new reform is wasted and the need for sound financial discipline and good management in public services and taxpayer-financed programmes. He also emphasised the need to give professionals far more autonomy in making decisions about the day-to-day running of the services in which they find themselves.
	Much of the debate has focused on targets in the health service. The Government face charges that the targets distort clinical priorities put political interests before those of the patients, and are contradictory and often produce conflicting results. They face charges that they often fulfil the targets by changing them en route or fiddling the figures, and that the targets create a culture that is deeply corrosive to professional people.
	There is no better example than that detailed in an article in The Sunday Times yesterday, which stated:
	"In one case earlier this year, a team of four surgeons was prevented from operating for five hours while it argued with a performance manager about a patient who was about to breach the 15-month waiting time.
	Paul Thorpe, chairman of the British Medical Association's junior doctors' committee and one of the surgeons involved in the argument, said: 'It was decided by the surgeons that the operation should be cancelled because there would not be an intensive care bed available after the operation.
	The performance manager came down to the theatre and said, "Don't do anything else; you must do this lady. I could lose my job over this." We spent from 9am to 2pm arguing about this one case because it involved a government target.'"
	That happens in the health service throughout the country. It is not the rare event to which the Secretary of State for Health referred; it happens increasingly frequently.
	Who should make decisions for an individual patient? Who would be best placed to make them? The best decisions would be made on the basis of sensitive and specific information. However, targets such as the maximum waiting time mean that the decision is taken as far away from the patient as possible. For example, a patient with severe arthritis of the hip can be pushed down the waiting list because someone with an ingrowing toenail has reached the maximum wait. That is illogical.
	Even if one agreed with the Government that targets were necessary, these particular targets are wrong. The most logical place for a target is not the time between presentation and diagnosis, which is when doctors have no idea of the clinical urgency needed. Doctors could give a clear waiting time, dependent on diagnosis, from the time of diagnosis to the time of treatment. The Government's targets are upside down.
	All this results from a single pledge given by Labour back in 1997 on elective surgery targets. Now all the activity in the NHS is distorted by that one target, which has become the centrepiece. Many of our primary care trusts are having money sucked up from them because the acute trusts have to make their waiting time targets.
	Let me give the House an example of how contradictory targets can be. The Government have a target for ambulance response times and a target to reduce accidents. The way to improve ambulance response times is to achieve a better speed between the location of the patient and the acute hospital, yet the Government have been so obsessed with their accident reductions that they have stuck speed limits all over London. Every one-minute delay in getting a patient with a myocardial infarction to hospital results in a 10 per cent. increase in mortality.
	The Government have so many targets, which are often completely contradictory, that they are undoing many of the things that they set out to do in the first instance. The first way that the Government meet their targets is to abandon them along the way. In November 1996, the Prime Minister, then Leader of the Opposition, said when referring to mixed-sex wards:
	"Is it beyond the . . . wit of the Government and the health administrators to deal with that problem?"—[Official Report, 19 November 1996; Vol. 285, c. 832.]
	In January 2000, Lord Hunt of Kings Heath, then a Health Minister, said that mixed wards are
	"wholly unacceptable. We are committed to ensuring that those wards . . . disappear by 2002".—[Official Report, House of Lords, 19 January 2000; Vol. 608, c. 1118.]
	However, in July 2002, the target was moved from eradicating mixed-sex wards to introducing more single-sex accommodation. That is an entirely different concept—in other words, "If you can't make the target, change the target."
	The second way that the Government meet their targets is to force the staff to fiddle the figures. Ian Perkin, former finance director of St. George's hospital, Tooting, said:
	"There's a culture that's grown up where the emphasis of management within the NHS has been about achieving targets, you know . . . come hell or high water. It doesn't matter whether achieved legitimately, you just have to achieve them"
	That is a terrible thing for a professional person to say.
	A former chief executive, who did not want to be named, for understandable reasons, said:
	"It was always my understanding, and that of my colleagues, that certain of the targets were what are euphemistically described as P45 targets. What I mean by that is if a particular target wasn't delivered, it was absolutely a sackable offence."

Evan Harris: Does the hon. Gentleman agree that it is a damning indictment of the culture of fear in the health service over targets that so many managers with real concerns were too scared to have their faces shown on "Panorama" for fear of the repercussions from their political masters?

Liam Fox: I will come to that point in a moment, but it is entirely right that there is a culture of fear and intimidation throughout the NHS. Those who might be willing to speak out about what they perceive to be failings in the system are afraid to do that. Indeed, the Government are intent on introducing a gagging clause for consultants in the negotiations on the consultants' contract.
	Perhaps the most obvious example of the Government attempting to fiddle the figures occurred in the recent exercise on the four-hour accident and emergency waiting time. The British Medical Association survey, which was mirrored by the "Panorama" survey, said that two thirds of A and E departments in England put special arrangements in place during the monitoring week.
	Preliminary results from a questionnaire sent to 500 A and E consultants found that the temporary use of medical and nursing staff was the most common tactic, at 56 per cent., followed by staff working double or extended shifts, at 25 per cent. Indeed, 14 per cent. of respondents were aware of routine surgery being cancelled so that extra beds would be available to admit patients through A and E. The majority of respondents believed that efforts to meet Government targets distorted clinical priorities. That involves not isolated cases, as the Secretary of State would have us believe, but 60 per cent. of A and E consultants.
	Don Mackechnie, an A and E consultant and chairman of the BMA's A and E committee, said:
	"I am appalled to see how A&E departments have been forced into taking extraordinary measures for a week-long period just to meet political targets. It is completely immoral of the Government to claim that it is raising the standard of performance in the NHS when this is how they measure it. It is quite wrong for patients expectations to be raised in this way . . . the Government's obsession with waiting times is nothing more than bean-counting. Patients deserve better than being treated simply as goods on a production line."
	That is what medicine is being reduced to.
	It is not only medical staff who are involved. Brian Dolan is an emergency nurse consultant—one of the grades that the Government have been proud to introduce. He confirms the suggestion of further manipulation:
	"There's an awful lot of scams and an awful lot of juggling of the targets. For example, 5 cubicles and you count only 3 of them when you're counting the trolley waits. You put a patient on a bed and they say you stop counting the hours they're there because . . . they're . . . effectively admitted . . . Putting a door up and saying, Well that's an observation unit, its no longer a cubicle, so . . . we won't count those trolleys. Putting a bit of a wall up and putting five or six patients in there and saying . . . that's the observation area, so we won't count those ones either. Sending them up to CT scan and stopping the clock. If they're being discharged and they're . . . simply waiting for transport, discharging them off the computer so it doesn't look like they've been there for quite as long."
	That is the ethical destruction of what we have, confirmed by the chairman of the Audit Commission, James Strachan:
	"The system is being distorted to meet those targets in the sense that money was intended for longer term purposes, like buying medical equipment, buying computers, simply maintaining the buildings, that's being diverted in order to be able to meet waiting time targets."
	In other words, what was intended as long-term reform is being sabotaged by the targets that the Government have put in place not to improve the short-term running of the health service but to achieve the headlines that Ministers so like, and also to ensure that their spin gets the right results.
	Today's debate began a great new double act—the Chancellor and the new Health Secretary. Interestingly, between them they apparently did not know the difference between heart disease and a stroke. That was either poor evasion by the Chancellor or a deeply worrying indication of the state of medical knowledge in the Government. However, we will give the Chancellor the benefit of the doubt—he was simply being evasive, as usual.
	We saw the amazing sight of the Chancellor—swivel-eyed and charging at imaginary demons during his 30 or 40 minutes at the Dispatch Box—abandoning any pretence of defending his record on targets in government. Instead, he ranted about Conservative proposals to liberate patients and to liberate British taxpayers. We saw the man once regarded as the intellectual bedrock of new Labour, if that is not an oxymoron, reduced to the propaganda equivalent of Comical Ali.
	Then we saw the even more sinister spectacle of the Health Secretary accusing, first, the hon. Member for Yeovil (Mr. Laws) and then the Conservatives of trying to run down NHS staff. I remind the Secretary of State that some of us on the Conservative Benches have been NHS staff. We were questioning the integrity not of NHS staff, who are as much victims of the Government's programme as the patients are, but of Ministers, who force NHS staff to act in a way that they find deeply unprofessional. Again, I quote the outgoing BMA chairman:
	"You would think wouldn't you that the government would be distancing itself from these corrupt and immoral practices. Instead, it has turned a blind eye, been triumphalist about its 'achievements' and colluded in the deception and doublespeak."
	That is the reality of where we find ourselves.
	The tactic of claiming that any criticism of Ministers' running of the NHS is an attack on NHS staff is deplorable and disgusting. Using NHS staff as a political human shield shows the deep moral corruption that is new Labour. NHS staff will rightly be appalled that they are being used in that way.
	We have had tax, spend and fail. There has been no real reform, just more spin. No wonder no one believes a word the Government say any more. New Labour is as corrupting as it is corrupt. The quicker the Government go, the better.

John Reid: Is it not significant that the hon. Member for Woodspring (Dr. Fox)—in the very last minute of his speech and the very last minute of 45 minutes of speeches from the Conservative Front Bench—finally had a good word to say about national health service staff? Let me start by paying a tribute from the Labour Benches to every one of the 1.3 million people who work in the NHS. We founded the NHS, we have defended it, we will modernise it and we will stand by it against every attack from the Conservative party.
	The truth of the matter is that tonight's debate is not about targets. It is about something much deeper: the great debate that is opening up as a result of the breakdown of the post-war consensus on health in this country. It is about a clear choice for the people of this country: between those of us on the Government Benches, who believe that health care should be free at the point of need to everyone in this country, irrespective of their background; and those on the Conservative Benches, who want to push people out of the national health service with 20 per cent. cuts, and to pull them into the private sector through partial subsidies—a point to which I shall return.

Liam Fox: rose—

John Reid: Sit down—you have had 45 minutes to say your piece.
	We make no apologies for targets. Targets identify priorities, and I say that not just because priorities are, as Nye Bevan said, the "language of socialism", but because they are also the language of good business. We should compare the Conservative Front Benchers' observation that targets are not used by business with that of Lord Browne, chief executive of BP-Amoco, who has run slightly bigger businesses than most of the Conservatives. He said:
	"Targets are two things really. They set standards for compliance but they do much more important things as well . . . they motivate people to . . . do better."
	They identify priorities and they offer delivery, because they drive effort and focus ingenuity towards achievable ends. In the national health service they also represent accountability, because they are a public benchmark of where and how we are delivering improvements.
	Incidentally, the Opposition Front Benchers did believe in targets. They told us before the last election that we should have a target not of waiting lists, but of waiting times. That is the policy on which they fought the last election. Of course, they have now changed. The hon. Member for Woodspring tells us that they do not believe in targets any more—they believe instead in setting measurements for quality in the system. The truth is that anyone with objectives that are to be pursued, focused and prioritised would find it reasonable to set targets.
	Of course, sometimes we do not meet the targets.

David Laws: Will the Secretary of State give way?

John Reid: I am sorry, but I must finish as I have only eight minutes. By this year, we wanted nine out of 10 of those who wished to see a GP to have an appointment within two days, on the way to achieving a 100 per cent. figure next year. It is a matter of regret that we failed: we achieved a figure of only 88 per cent., but that is 35 per cent. more was than was ever achieved under the Conservatives.
	The hon. Member for Woodspring—who will admit, given that he is the Conservative spokesman on these matters, that he is slightly biased—asked us to consult, so let me tell the House about the comments of Professor Sir George Alberti, who, like the hon. Gentleman, has considerable experience in the health service. He said:
	"The target is a bloody good thing because it has finally brought the spotlight onto a piece of the system that was unacceptable."
	He is talking about accident and emergency. He continued:
	"The A and E community is happier partly because they see the resources coming and partly because of the focus on them."
	Despite such effort and achievement this year in making sure that 100,000 fewer people spend four hours in an A and E department, all that the Opposition do is to run down the staff for fiddling the figures. They tell us—it is a disgrace that the Liberal Democrat spokesman did the same—that, somehow, the target was only achieved in a single week, through the giving of certain examples and a fiddling of the figures.

David Laws: rose—

John Reid: Let me put it on the record that there was an improvement in A and E figures not over one week or one month; in fact, the figures improved over five consecutive months. That is testimony to the professionalism and conduct of the people who work in the NHS.

David Laws: rose—

John Reid: If I misunderstood what the hon. Member for Yeovil (Mr. Laws) said, I withdraw my remark, but it certainly applies to the Conservative Front Benchers.
	Let us ask the question—[Interruption.] They can shout but they cannot run.

Liam Fox: rose—

John Reid: Ever since the Conservatives voted against a Second Reading of the legislation that established the national health service 60 years ago, we have wondered when they would revert—[Interruption.]

Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Gentleman, but a difficult situation arises when there is too much sedentary noise from Opposition Front Benchers and he addresses his remarks to a different part of the House. The combination is such that I cannot hear what is being said.

John Reid: I was trying to be emollient, Mr. Deputy Speaker. If you think that I should eyeball the Opposition, I am more than happy to do so.
	Why are the Conservatives so upset when we make advances towards our targets? Are they really upset because we have 50,000 more nurses? [Interruption.] No, they are happy—look at their smiles. Are they upset or disappointed that we have 10,000 more doctors? Do they seriously think it a cause for regret that last year, 450,000 more operations were carried out, or is it a cause for rejoicing? Suddenly, they have gone quiet. Are they really so upset that administration and management in the national health service account for 3 per cent. of staff, compared with the private health system in the United States, in which such people account for 24 per cent. of staff? Do they rejoice in that, or do they find it a cause for concern?
	Do they not understand that a reduction in the number of people waiting for an operation for more than a year in discomfort or pain from 22,000—the figure under the Conservatives—to the current figure of 159 is not just a statistic on an accountant's wall, or an entry in a Government ledger? Some 20,000 human beings have been removed from pain, distress and discomfort, at no cost to themselves. We on the Labour Benches rejoice when that happens.

Michael Howard: rose—

John Reid: I can explain—[Hon. Members: "Give way!"] If anyone wonders why the Conservatives are disappointed when we achieve those targets, through the efforts of those who work in the health service, I can explain by recalling the comments of the hon. Member for Woodspring. He said that the Conservatives' first task is to persuade the public that the NHS is not working, that the second phase is to convince them that it will not work and that it cannot work, and that the third phase is to introduce into the debate themes on how to fund reform. If he did not say those things, let him deny them. [Interruption.] He did say them and he is proud of the fact. If anybody ever wanted to know the true intention that lies behind the synthetic tears of the Conservatives—the intention that lies behind their disappointment at our reaching the targets—they need look nowhere other than to the words of the hon. Gentleman.
	If anyone in this country wishes to know the intention behind today's debate, they should do what we do in a whodunnit—follow the money. [Interruption.] The Conservatives have made two pledges: the first is to take 20 per cent. away from the national health service, and the second is—[Interruption.]

Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Gentleman again, but I do not want to hear accusations of lying directed at any Member of this House. May I suggest to the House that this debate be concluded in an orderly manner?

John Reid: The Conservatives' second pledge is the voucher—

David Maclean: rose in his place and claimed to move, That the Question be now put.
	Question, That the Question be now put, put and agreed to.
	Question put accordingly, That the original words stand part of the Question:—
	The House proceeded to a Division.

Mr. Deputy Speaker: I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 178, Noes 336.

Question accordingly negatived.
	Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
	Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
	Resolved,
	That this House welcomes the Government's record extra investment in health, education and Britain's other vital public services; supports the Government's agenda of linking this investment to public service reform through Public Service Agreements to build high quality public services for all; welcomes the attainment of economic stability, with low inflation, low interest rates, and low unemployment; believes that the achievement of this platform of stability has made record extra investment in public services possible; supports the Government's determination to do nothing to put this stability at risk; believes that after years of neglect between 1979 and 1997 it is even more important to invest in our public services and that to fail to invest in health, education, and other vital public services would be deeply damaging; and supports this Government's resistance to any attempt at this time of global economic uncertainty to cut public spending.

Tax Credits

Mr. Deputy Speaker: I should inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

David Willetts: I beg to move,
	That this House condemns the Government for failing to pay the new tax credits on time to millions of entitled families, including those who applied before the January deadline; is concerned that many families are still waiting to receive the money they are owed; regrets the serious financial difficulties suffered by many of these families; condemns the clumsy arrangements for paying overdue tax credits; calls on ministers to explain why the Inland Revenue computer system has proved so unreliable; shares the widespread concern that take-up of the new tax credits is likely to be low; regrets the quality of information available on the new tax credits; and calls on the Government to set up a system of emergency Social Fund loans to people who are still waiting for the correct tax credit payment.
	This debate is not about the principle of boosting families' incomes through the tax or the benefits system. That has been a well-established part of British policy for a long time. Nor is it about helping families in low-paid work. Again, Conservatives have long been in favour of providing extra assistance for such families, which indeed is what the family credit, which we introduced, was all about. Those issues are shared ground, and invented disagreements on them need not detain us tonight. We have called this debate for the simple reason that 1 million families are still not getting the tax credits to which they are entitled. That is the scandal to which we are drawing attention through this debate.
	Some of those families have applied, but have not yet been able to wade through the thicket of red tape to get their payments, while many others have not even applied in the first place. Ministers have given a range of estimates of the number of families affected, so I want to make the arithmetic absolutely clear. The Inland Revenue set it out in a very helpful poster, simply saying,
	"9 out of 10 families with children are now entitled to tax credits".
	As a result of a serious oversight in the Treasury, it gave a full and accurate answer to a question that I asked on the subject. I was told:
	"The number of families with dependent children in the United Kingdom in November 2002 is estimated at 7.2 million."—[Official Report, 1 May 2003; Vol. 404, c. 440W.]
	So we have 7.2 million families with children and 90 per cent. of them are entitled to the tax credits. That makes 6.5 million families with children who should be receiving those credits. That is the basic arithmetic—[Interruption.]—and I am pleased to hear that it is welcome on the Government Benches.
	We have had a range of estimates from the Government. The Paymaster General has sometimes said that 6 million are eligible. In the pre-Budget report the Chancellor said that around 5.75 million families with children were expected to benefit from the child tax credit. In fact, as fears of a debacle loomed, the Treasury's official estimate of the number of children and families entitled to the tax credit miraculously started disappearing. The Treasury took the cautious and careful measure of reducing the target before being judged against it. In his Budget speech, the Chancellor said that for the first time from this month, 5 million families with incomes below £58,000 a year would receive the new child tax credit. However, not 5 million, not 5.5 million, but 6.5 million families are entitled to it.
	What we know—the Paymaster General has made it clear again today—is that so far 4.2 million families are receiving the child tax credit and that a further 1.3 million families on income support or jobseeker's allowance will be moved on to that credit. That adds up to 5.5 million families: the gap between 5.5 million and 6.5 million is 1 million. There we have the 1 million families that are not receiving the help to which they are entitled. Those are the simple facts, and those are the families that we are representing in the debate tonight.

Roger Casale: The hon. Gentleman seems to have a good command of the figures, so can he tell us how many families are eligible for the credit in his constituency and what he has done to inform them about how to take it up?

David Willetts: I can tell the hon. Gentleman that I have done considerable work on the Inland Revenue MPs' phoneline trying to help constituents who come to my surgeries in great distress about their inability to get the tax credits, and every Opposition Member—and, I suspect, Government Member—has been doing exactly the same. We all know what the problem is and why it arose. Part of the reason I have before me now—a 12-page claim form that every family is supposed to fill in. It is said that it could be a lot worse, but the reason that it is only 12 pages is that in order to fill it in claimants have to read the 47-page information booklet as well, taking them through question after question, so families have to wrestle through 59 pages in all in order to get the tax credits that should be theirs by right.
	Let me quote an accountant from Grant Thornton:
	"We fill in lots of forms for clients. From the point of view of the claimant, they can't fill them in because they are simply too difficult. The people who most need the help can't afford that advice."
	The system has collapsed under the sheer weight of its own complexity and the last three months have been some of the blackest in the history of Inland Revenue, as millions of families have tried to make their way through the system.
	I shall give the House some examples of the problems that people have encountered. My hon. Friend the Member for Cotswold (Mr. Clifton-Brown), whom I see in his place, mentioned his constituent, Mrs. Stocker, who received a letter from Inland Revenue stating that she had not
	"signed and returned the award notice issued on"
	—and the date was supplied in this way—"00/00/0000". That was the date with which Inland Revenue was working. As a result, it was said that the payment of tax credits had stopped. Inland Revenue was simply incapable of recognising the date from the start of the claim. To add insult to injury, my hon. Friend's constituent received a letter from Inland Revenue stating that she did not qualify for tax credits because she was part of another household for which an award was currently in payment. They meant her husband's household, in which she thought she had lived, with him, for many years. The husband received a similar letter explaining that he could not be paid because she was supposed to be in receipt of the tax credit. They were then separately told that their children lived in a third household. That is the sort of shambles with which many people have had to wrestle in the past few months.

Geoffrey Clifton-Brown: Mrs. Stocker, my constituent, originally applied for the tax credit as long ago as last September. Despite much correspondence and many telephone calls, she received an acknowledgement only in November. She eventually received the reply to which my hon. Friend referred, but does he realise that she worked for Inland Revenue, so they had all the details all the time? Even worse, when I rang the MPs' helpline I was told that, because she worked for Inland Revenue, I could not use the line because her details were confidential.

David Willetts: I am grateful to my hon. Friend for that extra twist in this extraordinary saga. Other examples abound. My hon. Friend the Member for Wealden (Mr. Hendry) cited a case of someone who did not receive the tax credit, despite earning only £10,000 a year, because Inland Revenue had placed the comma in the wrong place and believed that she earned £100,000 a year. She received a letter explaining that she would not receive the tax credit for that reason. There are many examples of families caught in that trap.
	My hon. Friend the Member for North Thanet (Mr. Gale) showed me a phone bill from one of his constituents who had made 325 phone calls to the hotline to try to disentangle his child tax credit claim. One of the constituents of my hon. Friend the Member for South-West Bedfordshire (Andrew Selous), also in his place this evening, made 70 phone calls to the hotline. The man on that line eventually told him that someone would call him between 8 and 11 the next morning to sort out his problem. He then added, in a moment of truthfulness, that
	"the chances of . . . getting that call were the same as winning the lottery without buying a ticket".
	Having given the official answer, the man then gave the accurate answer—and, needless to say, no phone call took place the next morning. Those are the sort of problems with which hon. Members throughout the House have had to wrestle on behalf of their constituents.

David Cameron: Is my hon. Friend aware that the problem with administration also affects the Pension Service and pension credits? My constituent, Mrs. Costar, received a letter from her mother's last address, saying:
	"You will be pleased to learn that there is a new Government entitlement called pension credit, which could give you extra money each week."
	The only trouble is that her mother died in 1972.

David Willetts: I am afraid that that is the sort of example that every hon. Member has encountered and the problem is that enormous personal distress is often caused in that way. Hundreds of thousands of people have received insulting letters about their personal affairs and suffered enormous financial problems as a result of their failure to get money that they expected and were entitled to receive.

Andrew Selous: My hon. Friend rightly talks about the distress caused to people applying for the credits, but does he agree that those who work in Inland Revenue offices have themselves had to put up with an intolerable amount of stress because of what has gone wrong in the system? We should not forget them in this debate either.

David Willetts: My hon. Friend is right and I want to make it absolutely clear that our motion is in no way an attack on the people working in Inland Revenue, who find themselves in desperate circumstances trying to wrestle with hundreds of thousands, if not millions, of inquiries from taxpayers throughout the country who are seriously worried about their financial circumstances. The source of the problem is not Inland Revenue, nor even software problems and computing systems—though they may be part of the problem. The real source of the problem is the policy decisions taken by Ministers.
	To gain a measure of the shambles that people now face—some having to contend with months of delay before they receive their tax credits—let me remind Ministers of the speech given by the Prime Minister to his party conference on 1 October 1996. Those were the days when he could say, in a savage attack on the delivery of benefits under the Conservative Government:
	"It takes two weeks to get your first Income Support payment and then one in seven will be wrong. It takes a month to get your first Child Benefit cheque".
	Yet we know hundreds of thousands of people who would be delighted if they could receive their child tax credit within a month. They would look back on that period as one of halcyon days in which the benefit system actually worked. The Prime Minister then went on to say, because he was so shocked at people having to wait one or two weeks:
	"We will introduce a programme to reform Government. Our aim is to co-ordinate services across government using the advantages of technology now available, to provide a modern and up to date service for the customers of the state. Government for the people, not Government for the Government."
	That is what he promised in 1996. The gap between that rhetoric then and the reality now tells us everything about what has gone wrong under the Government.

Steve Webb: The hon. Gentleman is right to point to the administrative shambles of the tax credit, and we support his motion in that regard. He said that he is concerned about the actual policy, but the motion makes no positive proposals, apart from an emergency social fund. If he were in government, what policy would he adopt to make tax credits work?

David Willetts: I have three practical proposals to try to make the system work better and I hope that Ministers will consider them carefully. I hope that I do not have to superglue my hand to the Dispatch Box to get Ministers' attention.

Angela Browning: Has my hon. Friend noticed a pattern developing in recent debates? The Government make an absolute Horlicks of everything and then demand that we come up with the solutions to their mess.

David Willetts: My hon. Friend is right and I am grateful to her for that point. If I give the House a short summary of the story so far, it will be clear why our system of tax and benefits has descended into shambles. In the four years since 1999, we have seen the abolition of the family credit, then the introduction of the working families tax credit, the disabled person's tax credit, the child care tax credit and the employment credit. [Hon. Members: "Hooray."] Then the Government abolished the married couple's allowance. Then they introduced the children's tax credit and then a baby tax credit. [Hon. Members: "Hooray."] Then the system needed further reform, so the Government abolished the working families tax credit, the disabled person's tax credit and the children's tax credit—some of the very tax credits that they have just been cheering. Labour Members are a bit behind, but some of the tax credits only lasted a year, so they have to be quick. Having introduced the baby tax credit, the Government abolished it after a year. Then they introduced the new child tax credit, abolished the employment credit and introduced a working tax credit. That is what they have done in the past four years, and they ask us why the situation has become such a shambles.

James Plaskitt: The combined effect of the changes introduced mean that for the first child in a low-income family the weekly support is now £54.25. How much was it when the Conservatives left office?

David Willetts: At least under our Government, we did not have 1 million families who were not getting any help. It does not matter what the theory is, because if families are not getting the money, they are not getting the money. That is the point.
	I have three practical proposals for retrieving the situation. The first is to make better use of the provision that already exists in the social fund to make alignment loans.

Russell Brown: I do not know what sort of working relationship the hon. Gentleman and his colleagues have with their local Inland Revenue offices, but I have had many people come to my office and had no problem in diverting them to the local revenue office for payments to be made within 24 hours.

David Willetts: Sadly, many of us have found that the Inland Revenue emergency interim payments have not arrived to the timescale that many people have expected, and I shall give examples in a moment.
	The social fund includes a mysterious provision for something called alignment loans. They are a special invention whose sole purpose is to tide people over when they are not receiving other benefits to which they are entitled. It is a sad reflection on our social security system that we have to have alignment loans to lend people money while they wait for other benefits. Indeed, alignment loans are an increasing proportion of all crisis loans made by the social fund. For the last year for which we have figures, alignment loans were £36 million of the £75 million paid out in crisis loans. So the social security system already contains provision to make loans to people who have not received money that they are owed by Government agencies. It would be right to use those funds in this situation.
	I put that proposal to the Paymaster General, asking what discussions had been had with the Chancellor on that point. Her answer, in terms of sheer complacency, breaks even her record. She said:
	"The Department for Work and Pensions is working with the Inland Revenue to ensure that there is a seamless transition"—
	a good, old seamless transition—
	"to the new tax credits system and that there is good liaison between the two organisations to ensure that awards of both tax credits and social security benefits are made promptly to people in the most urgent need."—[Official Report, 18 March 2003; Vol. 401, c. 684W.]
	That is what the Paymaster General claimed, but that is not the reality. If it were, we would not need the social fund loans. However, many people on low incomes have not received their money.

Dawn Primarolo: indicated dissent.

David Willetts: We all know that hundreds of thousands of people have not received their money, and that is why the social fund loans are necessary.

Several hon. Members: rose—

David Willetts: I wish to make progress, because hon. Members on both sides wish to speak in the debate.
	Secondly, the Paymaster General should lift the deadline, which falls tonight, after which people will no longer be able to apply for the child tax credit and receive the full year's payments. If one already has children and put in an application for the child tax credit from tomorrow, it will be backdated by three months and, therefore, it will not be for the full year. As every month passes, people will not be able to get the full year's value of the child tax credit. There is no reason why the Inland Revenue should have a rule on the backdating of payments of tax allowances within the financial year. Most tax allowances may be claimed even after the end of the financial year.
	The same Inland Revenue and Treasury press officers who were briefing over the weekend that it would be impossible to remove the backdating rule were saying the opposite when it came to the baby tax credit. The baby tax credit is a special, double rate of tax credit, payable for children in the first year of life. It is a record-breaking tax credit—out of 500,000 families entitled to it, so far only 150,000 have received it. That 30 per cent. take-up rate is perhaps the lowest of any tax credit yet, although the Government may yet manage to improve on that performance. When we drew that to the attention of the Treasury, a spokeswoman did not see what the problem was because
	"People have up to 2009 to claim for the baby element of the old children's tax credit."
	So when there is a low take-up of the baby tax credit, people have until 2009 to claim, but the guillotine is about to drop for people who wish to claim the child tax credit this year. There is no reason for that and we believe that there is a strong case for flexibility.
	Thirdly, there is a strong case for compensation. We hope that we will hear authoritatively from Ministers what their policy on compensation will be. People need guidance. They have suffered serious financial losses as a result of the failures of the system. For example, a constituent of my hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman) found that the Inland Revenue was no longer sending payments directly to her account on the dates that it was supposed to. Instead, she was being sent giros irregularly. As a result, she could not be sure that the money would be in her account to pay her direct debits, and she has incurred £129 of bank charges because she has gone into debt because the payments have not been received regularly. In another example, a lady's bank charged her £320 in returned cheque fees after she had written cheques on a promise by the Inland Revenue that the interim payment would be made within 24 hours—as the hon. Member for Dumfries (Mr. Brown) claimed. She did not receive the money, the cheques bounced and she faces £320 in charges as a result. Those are the people who need to know whether they are entitled to compensation, and I hope that we will hear from the Minister on that point tonight.

Roger Casale: Will the hon. Gentleman give way?

David Willetts: No, I want to move to a conclusion as other hon. Members want to speak and I want the Secretary of State, in particular, to talk about his responsibilities.
	What is going on? This shambles of a tax credit system has the Inland Revenue, which finds it difficult enough to be a tax-collecting department, suddenly trying to become a benefit office as well. The implications of the shambles go way beyond the Inland Revenue and the child tax credit—although those are serious enough—and spread to the entire structure of the welfare state.
	Will the Secretary of State comment on two problems? The first is the problem of unemployed people who are on income support and whom all of us, on both sides of the House, want to see encouraged into work. I shall report for the Secretary of State a conversation that a person on income support had with his new deal adviser recently. He wanted advice about how, under the new tax credit, he could be better off in work than out of work. The new deal adviser said:
	"If you were to ask if there was any problem with registering for 'Tax credit', I would have to say no. I could not tell you that if you registered today you would not be able to feed your children in 3 or 4 weeks time. I could not tell you that we can't access the system on computer or phone. I could not advise you to wait until the backlog"—
	of hundreds of thousands of cases—
	"is dealt with. Should you decide to wait I can't tell you that you will go into an unofficial file in order that we may notify you if and when the situation improves. I also can't show you an internal memo stating that the system has totally collapsed."
	The memo was turned towards him.
	In the light of that conversation, that person decided that the safest thing was to remain unemployed on income support. He was being advised by the new deal adviser that the tax credit system was such a mess that the only way to guarantee that he would continue to receive payments was to stay on income support.
	I know that that is not what Ministers intended. I fully accept that that was never the purpose of their system, but I hope that they will have the honesty to admit that that is the consequence of the introduction of their policies.
	Finally, may I ask the Secretary of State about pensioners and the pension credit regime? We are concerned that the Government are learning the wrong lesson from the child tax credit shambles, as they look to the implementation of the pension credit, which is supposed to start in October this year. They seem, above all to be concerned with minimising applications.
	All Members have received a letter that states:
	"We will be contacting about 20 per cent. of the pensioner population, selected at random, between April and September 2003...but the main telephone application service and the Pension Credit launch starts in October . . . We have introduced this special arrangement before October so that we have a controlled and measured build up of applications."
	In fact, the letters do not even contain an application form. They are not intended to make it easy for people to apply for their benefit; they do not even contain details of the application procedure.
	A Department for Work and Pensions spokeswoman was quoted as saying that the Department wants to
	"minimise the number of paper applications".
	I do not know how many pensioners will apply over the internet—no doubt, some will—but that is not the way that most of them want to apply for the pension credit—[Hon. Members: "Phone."] Before Labour Members shout about the phone, they should be aware of the experience of almost every phoneline introduced by the Government.
	On the pension credit form, the answer to the question "How will I be able to apply?" was:
	"We will be writing to people aged 60 and over between April 2003 and June 2004."
	That end date is nine months after the supposed launch of the new pension credit. The Government have not been publicising the phoneline that pensioners can use. They do not want pensioners to know about it; it does not appear on the posters. The Government have concluded that the best way of ensuring that the pension credit does not have the same problems as the child tax credit is to give it such a low profile that not many pensioners will claim it.
	If low profile is what the Govt want, the Secretary of State is the ideal man for the job. Low profile is not good enough, however. We want pensioners to receive the pension credit to which they are entitled. We want families to receive the child tax credit to which they are entitled. Instead, for the past three months, we have seen administrative failure, policy failure and distress for millions of families up and down the country. That is why we are moving the motion.

Andrew Smith: I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
	"notes that the introduction of the Child Tax Credit is the biggest single change in support for families since the Beveridge reforms of the 1940s, and a more radical change than the introduction of Child Benefit 25 years ago; notes that the new tax credits represent the biggest ever investment in families with children, with no government ever having spent so much on children and families; welcomes the fact that 90 per cent. of families with children are eligible for the Child Tax Credit; further welcomes the fact that tax credits are now being paid to 4.2 million families; notes that in addition 1.3 million families with children on Income Support and Jobseekers' Allowance are already benefiting from the increased level of support through their benefits; welcomes the fact that 5.5 million families are therefore now benefiting from tax credits, with more and more being paid every week; and believes that these figures belie the persistent criticism that people would not claim, and that those who said that families would not apply for the new tax credits, and that take up would be low, have been proved wrong."
	I am pleased to move our amendment and to reject the claims of the Opposition. Their motion talks about low take-up, yet 4.2 million people are already receiving the new tax credits—[Interruption.]—the hon. Member for Havant (Mr. Willetts) is nodding; and 1.3 million people are receiving new rates of benefit. That the Opposition try to brand tax credits a failure when millions of people are gaining from a system that has been going only for a few months shows how ludicrous the hon. Gentleman's claims are.
	Even on the arithmetic that the hon. Gentleman set out at the beginning of his speech, take-up is about 84 per cent. He told us about the shared ground on helping poor families and helping people into work and how wonderful the family credit was, but does he know the take-up rate for family credit in its first year of operation? It was 57 per cent. at most. His is a classic case of "Do as we say", not "Do as we did". When the Conservatives had the chance, they got it wrong; family credit take-up was abysmal, so we shall take no lectures from them. Millions of people are already gaining from tax credits.
	If people needed any convincing that today's Tory party has something to hide, a policy agenda that they dare not tell the British people, the hon. Gentleman's speech, bereft of any positive policy proposal—as the hon. Member for Northavon (Mr. Webb) pointed out—will have persuaded them. I listened in vain for any idea of what the hon. Member for Havant and his party would do to replace the tax credits that they are so keen to run down. I am surprised by and disappointed in the shadow Secretary of State for Work and Pensions. We all know him to be a man of some intellect—

David Cairns: Two brains.

Andrew Smith: In one of those brains, there must be some thoughts about what the Conservatives would actually do in government.
	I think that the hon. Member for Havant is being held back and gagged by the ever more extreme shadow Chancellor, who clearly did not relish conducting this debate himself. There is a sinister reason for that. The truth is that the shadow Chancellor has his eye on the £13 billion investment in children through the tax credits as part of his commitment to cut public spending by 20 per cent.

David Cameron: I am not sure whether I regret interrupting the right hon. Gentleman's rant, especially after such a reasonable speech from my hon. Friend the Member for Havant (Mr. Willetts). My question relates to an e-mail that I received from one of my constituents, Mrs. Summers of Chadlington. She asked why the baby element of the child tax credit applies only to one child at a time. Why is not it payable for twins? That seems a reasonable point, given that the cost of bringing up twins is so much greater.

Andrew Smith: It follows the rules for child benefit; they are applicable to the credit and I am sure that the hon. Gentleman wants them properly applied.
	I was talking about the shadow Chancellor's designs on the £13 billion. We all know about his plans to cut the new investment that Labour has made in health and education. The last thing that he wants is for the hon. Member for Havant to apply his ingenuity to developing positive policies, and still less that he should tell people about them. The right hon. and learned Gentleman simply wants the hon. Gentleman to get on with undermining and trying to destroy the tax credits, without getting caught up in the arguments about the best way to tackle poverty, turn welfare dependency around and support children and families. The shadow Chancellor may not want to address those arguments, but that makes it all the more important for us to spell out why tax credits are the right approach—[Interruption.] Opposition Members do not want to hear why they are the right approach; they do not want to hear that tax credits are already benefiting more than 4 million people and why it would be so disastrous if the Tory party got the chance to do away with them.

Andrew Lansley: It is a pity that the Secretary of State only took about 90 seconds to move from the Government's figures to discuss Opposition policy, but he referred again to more than 4 million tax credit payments being made. On 28 April, the Paymaster General told the House that there were more than 4 million applications, and the Government are now telling us that there are 4.2 million claims in payment. Will the Secretary of State therefore guide us through the relationship between those figures? More than two months ago, we were told that there were more than 4 million applications, but how many applications have now been made and how many are applications are awaiting a decision and not yet in payment?

Andrew Smith: There are 4.5 million applications, of which 4.2 million are in payment, as we have already said. The hon. Gentleman accuses me of moving from the figures, but I shall come to the figures later; he has not heard the last of the success that the figures demonstrate.
	As we all know, the new tax credits represent the biggest change in social support since Beveridge. They help people to move from welfare to work, bridging the gap between support for those who are not working and help for those who are. For the first time, they recognise in the tax system the extra cost of bringing up children, and they improve work incentives for second earners who work part-time at typical entry wages.
	I listened to the hon. Member for Havant telling us his story about the new deal adviser and the tax credits. Does it not occur to him and his right hon. and hon. Friends that, if the Conservatives had won the last general election, there would be no new deal, no new deal adviser and no tax credits for them to talk about?
	Tax credits are inclusive because they support people with children, whether or not they are in work, and people in work, whether or not they have children. They are more generous to working families on modest incomes. They give more flexibility over child care, enabling parents to change their arrangements to suit their needs and ensuring that those on maternity or paternity leave continue to receive the working tax credit. They represent a decisive break from a past in which there was one system of support for the poor and those out of work that was easily stigmatised, and another system of support for the better off, so the tax credits tackle stigma. Those are decisive advantages.
	I heard nothing in the speech of the hon. Member for Havant to suggest that the Conservative party wants to do anything other than turn back the clock, making it harder to move from welfare to work, as it was when the Conservatives were in government, giving inadequate recognition to the cost of bringing up children, entrenching social division, denying parents choice, limiting child care options and stigmatising the poor. It is clear that they have learned nothing and would return the country to the high unemployment, welfare dependency and deepening poverty that was the hallmark of the Conservative years.

Steve Webb: A moment ago, the Secretary of State rightly pointed out that what is distinctive about the new tax credits is that, for the first time, they include people without children in in-work support, but we have heard no separate figures for childless people, who might be expected to have low take-up because they have never been in the system before. Will he tell us how many childless people are receiving the new tax credits? If he cannot do so off the top of his head, will he us assure that the Paymaster General will give us the precise figure for childless people when responding to the debate?

Andrew Smith: I am sure that my right hon. Friend will give the precise figure, but what I can say—the hon. Gentleman is right to draw attention to that aspect of the tax credits—is that the gain for those on low pay can be as high as £50 a week. Whatever differences exist in the Chamber on the principle of tax credits and the resources that go into them, I hope that every hon. Member will join in campaigning not to run them down and discourage people from applying for them, but to claim their entitlement.
	The motion and the debate show us that Conservative Members' real complaint is not the practical problems of introducing the new credit, but that we are introducing a progressive system. The whole aim of their campaign and today's debate is not to make the new tax credit work better, but to undermine them and the help that they provide to millions of people. If that were not their aim, they would go out and campaign for take-up, or they would come to the House with an alternative policy and tell us how they would tackle poverty, welfare dependency and the cost of bringing up children. They have done neither. We have heard no such case. Instead, they try to misrepresent the difficulties that there have been in implementation as a failure of the whole approach. Those claims are just as wrong as the predictions that they made when they said that families would not apply for the new tax credits. They said that take-up would be low.

Roger Gale: The House has been subjected to a few minutes of bluster of which Alastair Campbell would be proud. Let us now face the facts: there are decent, honest civil servants in the Paymaster General's office, for whom I personally have a high regard, who have cringed with embarrassment and then sent motor cycle couriers around the country with money, trying to bail out our constituents who have been left destitute and run up debts. Will the Secretary of State just answer one simple question—yes or no? Is he satisfied with the operation of his Department's national computer?

Andrew Smith: I am not certain what my Department's national computer has got to do with the debate. The hon. Gentleman makes a fair point about civil servants' integrity and commitment. People throughout the country are committed to making a success of tax credits, as are the Government, and the Conservative party should be supporting that campaign and take-up effort, not using every pretext to run it down, make ludicrous predictions about what will happen and brand the whole thing a failure. Let us look at the facts: 4.5 million claims have been made already and tens of thousands more are coming in every week—and 4.2 million claims are already in payment, as we have said.

Ann McKechin: Does my right hon. Friend agree that not only are childless workers now benefiting for the first time, but that the benefit is very valuable for disabled workers? One of my constituents, who is disabled and works part-time, will gain an additional £3,500 per annum as a result of the new tax credit system, so I am sure that hon. Members will agree that this Government, unlike the Conservative party, are making a real difference to disabled people in this country.

Andrew Smith: My hon. Friend makes a very good point indeed. The extra help that the tax credits provide is of enormous value; it is helping our whole drive on welfare to work for people with disabilities and others.

Geraint Davies: Does my right hon. Friend accept that, at 90 per cent., take-up is very high indeed, compared with the previous means-tested take-up, which was nearer 50 per cent.? Does he also agree that, given that the benefits apply to those with incomes of about £58,000 a year, it is very likely—the facts bear this out—that the people who are not taking up the benefits are those who earn more than £50,000? So there has been a terrific success in targeting and delivering money to families and paying benefits through people's pay, rather than through the old, stigmatised Tory system that did not work.

Andrew Smith: My hon. Friend makes a very good point. Not only is the take-up higher than was the case with the measures taken by the Conservative party, but the benefits are very much more generous and they are transforming living standards and opportunities for people throughout the country. Millions of people have benefited in the first few months of the scheme. There have been practical failings in implementation, for which the Government have apologised, but the overall picture is one not of tax credits failing, but of tax credits succeeding.
	As I have said, we acknowledge that there were problems in implementation, delays in payment, difficulties using the helpline and slow running of the IT system, and the Government and the Inland Revenue have apologised for the effect that that has had on the families affected. We have taken early action, putting in place a system of interim payments, and we have taken other steps to improve the system. The hon. Member for Havant advocated the social fund. I cannot understand why the system of interim payments that the Inland Revenue has operated does not commend itself to him as obviously more simple.

David Willetts: It is not working.

Andrew Smith: The hon. Gentleman says that, but 200,000 people have benefited from interim payments, paid within 24 hours of their asking for them.

Archy Kirkwood: The Secretary of State has captured in his last few sentences the fact that however well the policy was addressed and passed through the House, the administrative difficulties have been greater than anticipated. For that reason, if for no other, the hon. Member for Havant (Mr. Willetts) was on a strong point when he asked the Government to reconsider the window for backdating. A three-month period in normal circumstances is perfectly reasonable. Having regard to the difficulties with the administration of tax credits, will the right hon. Gentleman, working with the Inland Revenue, allow at least until the end of this calendar year to get people sorted out and to get the administration sorted out before the three-month travelling window of backdating kicks in?

Andrew Smith: I understand well why such a case is made, and I listen to it with special care when it comes from the Chairman of the Select Committee. A real danger exists, however, that those who advocate it will contradict themselves. On the one hand, Conservative Members have argued that the system is too complicated, yet now they urge us to add further complexity. All Members will know people whose circumstances have changed and for whom several sets of information would have to be given. Conservative Members should consider again what their party did in office. When the Conservatives faced this issue with family credit, did they provide a year's retrospection? No; they operated normal backdating of a maximum of one month, and people had to show just cause to access it.

Annabelle Ewing: On that latter point, I find the Secretary of State's answer unconvincing. Surely it does not matter what the Tories did when they were in government. Surely it is up to this Government to do better. In any event, my key question concerns the admission by the Secretary of State a moment ago that errors were made. Can we have a statement on whether the Government will pay compensation to those people who have out-of-pocket expenses as a result of the errors that he admitted a moment ago?

Andrew Smith: The hon. Lady said that we ought to do better than the Conservative party, and I certainly agree with her about that. Of course, we are doing better with the new tax credits, which are three times as generous as the family credit arrangements. On compensation, that is governed by an Inland Revenue code of practice, which must apply in this case as in other cases.
	We acknowledge the difficulties that have been experienced, and we apologise for the effect on families. Let us also remember, however, that the overwhelming majority of payments were made to families on time and accurately. Performance of the system has improved. The Inland Revenue is clearing many more cases than it is receiving. I have certainly had more positive feedback from constituents and others who appreciate the real difference that the new credits are making to their standard of living and to their child care choices. Building on what has already been achieved through economic stability, 1.5 million more people in jobs, the new deal, the minimum wage, the increases in child benefit—which the Conservatives froze for nearly their whole period in office—the working families tax credit, improved child care and the new tax credits bring further help to families and those on low incomes. They carry forward our drive for a strong society in which everyone has the chance to make the most of their potential, and in which no one is left behind.

Michael Connarty: I applaud the extra £2.7 billion that is going into help for families. Does my right hon. Friend accept, however, that some families—perhaps a larger number than we currently understand—who were on income support and who work for low wages received the tax credit and lost income support? They found themselves paying council tax and rent, and in one case in my constituency they found that they had £60 a week less for their children than previously because of bills coming in and because they had been taken out of income support by the tax credits.

Andrew Smith: I recognise that the movement from welfare to work, which was very difficult under the Conservative party, and which we have improved substantially, involves withdrawal rates, tapers and additional costs. That is why, all the time, we are examining how we can improve the gains to work for those who make that difficult transition. I must say, however, that there is no comparison between the support and the extent of movement from welfare to work under this Government and the abysmal record of the Conservative party. It is the combination of the new deal help, which it opposed, the minimum wage, which it opposed, and the tax credit system, which it opposes now, that makes the difference. Let us remember that we started with the awful legacy of the Conservative years, inheriting a fractured society—[Interruption.] Conservative Members do not like to hear it because it is so true. It was a society riddled with divisions and plagued by poverty and social exclusion. Over 18 years, the Conservative party widened the gap between rich and poor, with millions being thrown into poverty.

Nicholas Winterton: I am listening carefully to the Secretary of State's speech, as I did to my hon. Friend the shadow Secretary of State. Both of them have done a service to the people of this country. Will the right hon. Gentleman not admit, however, that one of the grave problems with the implementation of these tax credits, which I warmly support and with which I agree, is that people lose benefits that they have hitherto received before the tax credits were implemented? People are therefore left with much less income to pay large bills. Will he not only reply to that but indicate whether the Inland Revenue regulations relating to compensation might take that point into account, so that people can get redress for the huge debt that they piled up through no fault of their own?

Andrew Smith: First, I thank the hon. Gentleman for his characteristically kind remarks. I recognise in him and in the spirit with which he addresses this matter a true one-nation Conservative. If more of his right hon. and hon. Friends would listen to him and to that approach, which is designed to build communality and strength in our society, and communality of interest—[Interruption.] I must be careful what I allege that he supports: a strong society in which our interdependence is recognised and in which we help people out of poverty by giving them a helping hand. If he can give me illustrations of the problem of the gap between benefits and tax credits kicking in, I will be pleased to look into them. I know of nothing within the design of the system that allows that to happen or should allow it to happen. Indeed, I know of many instances in which we are operating benefit run-ons to enable people to be assured that they are still getting their benefit income while meeting the costs of taking up a job.
	We have been turning things round from the devastation and the division of those Conservative years—[Interruption.] Conservative Members groan, but millions of children grew up in neighbourhoods in which the odds were stacked against them and they were consigned to a life on inadequate benefits. Since 1997, we have started to turn that awful legacy around. For the poorest families in this country—as my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) asked and the hon. Member for Havant—was unable to answer earlier-child support was £27.70 a week in 1997. Through child benefit increases and the child tax credit, that will now be £54.10 a week for the first child: a near doubling of support since we took office. With economic stability and growth, we are helping to make work possible through the new deals, the investment in rolling out Jobcentre Plus, expanding child care and tackling the burden of child care costs. More than 180,000 families are receiving an average £41 a week to help with child care. We are helping to make work pay through the minimum wage and reform of taxes and benefits to improve the gains to work, to help with the costs of children and, for the first time, to raise the incomes of those in work without children. The Conservative party really cannot stand the fact that all of this is working. Our policies have got record numbers of people into jobs and have meant that 1.5 million fewer children endure the sort of poverty that was experienced during the Tory years.
	If all our tax and benefit measures are taken together, an average family with children gains £1,200 a year and the poorest families gain £2,500 a year. We are determined to go further, which is why we have pledged to halve child poverty in a decade and to abolish it entirely in a generation. The British people know that when the Tories oppose the new tax credits, they are opposing the crucial next stage of making work pay and supporting families. It is clear from the debate that the Conservative party stands in the way of opportunity for all and a fairer Britain. We relish the opportunity to argue our case because with a Labour Government and the tax credits, Britain has more jobs and higher living standards. We do not leave the poor behind.

David Willetts: May I make it clear to the Secretary of State that the purpose of the proposal to remove the deadline today is to allow more families to get the tax credit and be sure of the income that he is talking about?

Andrew Smith: That point would have been more persuasive if the hon. Gentleman and his party did not keep arguing and voting against the tax credits and trying to undermine and destroy them. The truth is that as we lead the country beyond the damage and division of the Tory years, our record on making inroads into poverty and raising incomes for all—for the poorest, most of all—is cause for confidence that we will complete our work of building a society of social justice and opportunity for all. That is what the debate is all about: we are in favour of opportunity for all and a fair Britain, but the Conservative party stands in its way.

Steve Webb: It is quite right that we are debating the administrative shambles of the tax credit system. All constituency Members will have met and spoken to many people who have been unable to get through to the helpline and who have been deprived of money because one benefit has been taken away before the new tax credit has been introduced, leaving them in urgent need. I asked whether that will happen next April following additions for children. I am told that it cannot happen and that people will retain the child element of their income support until their child tax credit comes through. I hope that that happens in practice because it clearly did not happen this time round and many vulnerable people lost out.

Nicholas Winterton: I am pleased that the hon. Gentleman raised that point so early in his speech because it was the point that I put to the Secretary of State. He denied that such things were happening, but, unless I have completely misunderstood the letters that I have received, it is happening. Benefit is being taken away before the new tax credit is implemented. Is the hon. Gentleman confirming that, because, if he is, it is the real issue about which I am deeply concerned?

Steve Webb: The hon. Gentleman puts his finger on precisely what is happening. There should have been a guarantee that the most needy families who received the old top-ups to their wages—the old working families tax credit—would keep the money until the new money was on stream. That would have prevented a lot of the pain, but it did not happen.
	We should set the context of the debate by pointing out that the Bill that introduced the system went through the House unopposed. No party objected to the principle of the new tax credit regime. I had the dubious privilege of serving on the Committee that considered the Tax Credits Bill and on the Committee that considered the previous Bill on tax credits. The Conservatives tabled many amendments on fraud, quite reasonably, but very few related to the issues that we are discussing. There has been an administrative failure to deliver a system of extra help for low-income families that was broadly endorsed by the House as a whole.
	The schizophrenic relationship between the Treasury and the Department for Work and Pensions was beautifully summed up when the hon. Member for North Thanet (Mr. Gale) asked about the Secretary of State's computer. The Secretary of State said, in as many words, "Don't ask me, it's not my Department." The computer is not his at all—it belongs to the Treasury and the Inland Revenue. I am slightly puzzled that the Secretary of State is speaking in the debate at all, because the new regime is supposed to be part of the integrated tax system.

Andrew Smith: Does the hon. Gentleman accept that if the official Opposition had put up the shadow Chancellor to lead the debate—I suggested earlier that they should have done, but he clearly did not want to debate the subject—Treasury spokespeople would be speaking rather than the hon. Member for Havant (Mr. Willetts), me and the hon. Member for Northavon (Mr. Webb)? Why is he speaking?

Steve Webb: The shadow Chancellor led the previous debate and I think that one debate in a day is quite sufficient for him.
	Who is responsible for the system? The Secretary of State did not say that he knows nothing about it, so he clearly takes a close interest. The problem is that it is not really a system of tax credits at all because the Government have not integrated the measure in the tax system. The three-month backdating rule is a benefit rule, so the credit is really a social security benefit. There is a take-up problem because the credit is not integrated in the tax system. I recall that there was no take-up problem with the married couple's allowance, but the flat-rate child credit—the analogue of the old married couple's allowance—does have a take-up problem. Some people receive less money under the new system because they took up the married couple's allowance but do not claim the new tax credit.
	Take-up is important. It is perfectly reasonable for the Secretary of State to point out that there was low take-up during the initial phases of family credit, but he cannot gloss over the fact that 1 million families are missing out. The baby credit take-up rate is extraordinary. The hon. Member for Havant (Mr. Willetts) read a quote from The Times on Saturday that said that the baby credit may be claimed until 2009—I suspect that most children will have grown out of baby clothes by that time. Indeed, the claim could probably be combined with claims for pension credit to save trouble. However, the idea that the baby credit may be claimed five or six years after children were babies demonstrates the absurdity of the entire system.
	Take-up is a real issue, which is why my hon. Friend the Member for Roxburgh and Berwickshire (Sir Archy Kirkwood), the Chairman of the Select Committee on Work and Pensions, is absolutely right to say that we could put back the deadline without a problem. I did not understand the Secretary of State's response to that point. If people claim in August, the assessment is still based on their income during the whole financial year because that is the way in which the system works. Why must they supply more or different information if the claim is backdated only three months rather than to 6 April? The claim is still based on annual income, so payment must just be made for more weeks. The Secretary of State will reflect that his argument was specious, and given the deference that he properly paid to my hon. Friend, as we all do, I hope that he will revisit the point and either give us a more credible response or accept the point that we made over the weekend. Although that point is not detailed in the Conservative's motion, I am delighted that the hon. Member for Havant has come on board.
	I also hope that the Paymaster General will answer my point about childless recipients, because they are the great forgotten people. The Institute for Fiscal Studies estimated that nearly 500,000 childless couples and single people with full-time, low-paid jobs would be brought into the new system for the first time. We have not received any separate figures showing the take-up among those groups—presumably because it is appalling. [Interruption.] I am happy to give way to the Paymaster General if she wishes to contradict my point.

Dawn Primarolo: I apologise for interrupting the hon. Gentleman's flow. It is not the case that there are no figures, and I shall answer his question when I wind up the debate.

Steve Webb: I am bereft.
	A second group of people with problems are not those who have not yet received their money but, bizarrely, those who have received too much. Now that people have started to receive money, some have received ridiculous amounts. The hon. Member for Havant mentioned a person whose income was entered as £100,000 rather than £10,000, but there are also people who are receiving far too much money because their income was entered too low. They are trying to give the money back but they cannot. I am worried because the maximum payments can be thousands of pounds. If such payments are made to people who are entitled to only the basic payment of £500, they will be thousands of pounds in surplus.
	Will the Paymaster General tell us how the money will be clawed back? Small overpayments could be dealt with by reducing the following year's payment, but if people are entitled to £500 yet receive £5,000 will they receive nothing for nine years or, as I suspect, will the Inland Revenue ask for it back rather more quickly? People might hear the Government's rhetoric and think that the new system generously gives lots of money and, thus, spend the money on their children. What will happen if the Inland Revenue asks for it back? Will she run a scan on her computer, as I asked her to in a Westminster Hall debate on the same subject, on entitlement this year to the children's tax credit and entitlement last year to the working families tax credit to spot cases in which someone's entitlement has shot up tenfold, and investigate where mistakes have been made? That would help to pre-empt the problem and would be better than merely reacting to it when something goes wrong.
	Much of what we have heard relates to problems with the IT system. A common thread runs through those problems. I understand that the company EDS is involved in the computer system for the tax credits. I also understand that it is involved in the computer system for the Child Support Agency, which is not going well. In addition, I understand that it has a hand in the pension credit system as well. How can we be confident that the pension credit system will not be even more of a shambles than the existing tax credit system? The same hands appear to be on the tiller in each case. There are some important questions to ask about the Government's IT projects, the management of those projects and whether the Government become beholden to one supplier when the contracts come up for renewal because no one else would dream of taking them on, in which case the taxpayer is not getting good value for money and the public are not getting good service.

Roger Gale: Does the hon. Gentleman accept that a fairly senior civil servant involved in the CSA told me this morning that there is no prospect in the foreseeable future of historical cases migrating to the new system because the CSA computer is in total chaos? As I said to the Secretary of State, who clearly does not have a clue what is going on in his Department, his computers in general are in chaos.

Steve Webb: The hon. Gentleman is right. Dealing with new CSA cases should be straightforward because they have been relevant only since March. If a small fraction of the caseload is in chaos, I am worried whether the whole system will work correctly. The addition of the tax credits and the pension credit means that we are heading for chaos. That has to be a worry for our constituents.
	The hon. Member for Falkirk, East (Mr. Connarty) raised the important issue of passported benefits. That has also been a bit of a shambles. I hope that the Paymaster General can clarify the rules. When people who are not on the maximum rate of income support move on to the child tax credit, they could lose the income support element entirely. How will the passporting work in that situation? I visited the Department of Health website today to look at the health benefit scheme, which is important to low-income families because it includes measures such as free prescriptions. The website on low-income health benefits says, "If you are on working families tax credit", which was abolished four months ago, "these are your entitlements." There is then a little note that says, "This page will be updated." That shows the lack of joined-up thinking across the Government on passported benefits because, four months into the new system, the Department of Health has not got round to issuing new guidelines. Problems will be acute next April when the poorest families come across to the new system, because they really need the passported benefits. I hope that we have a coherent explanation of how passporting will work.
	There is one aspect of tax credits on which I will court unpopularity with the public at large. I understand that the Inland Revenue has thrown resources at trying to sort out the problem of the tax credit backlog by putting people's tax returns in a corner in a room in Bootle. I am reliably informed that somewhere in Bootle there is a cupboard with a big pile of unopened tax returns.

Dawn Primarolo: I need to correct the hon. Gentleman. There is not a cupboard in Bootle, or anywhere else for that matter, with tax forms, filed in boxes or any other way. They have been processed; his story is incorrect.

Steve Webb: I am grateful for that reassurance. Everyone will get their tax demands on time after all. I have succeeded in gaining another Liberal Democrat victory.
	The hon. Member for Witney (Mr. Cameron) raised the small issue of twins. The Government could do some good on that without spending serious money. I am grateful that the Paymaster General indicated that some progress might have been made on that front. If twins are born, the child credit system means that the family receives one lot of child credit, because it is an amount per family, unless they are on a very low income, in which case there is an extra amount. However, the lump sum cost of twins is, potentially, double. For example, a family needs two prams; it is not possible to have a hand-me-down pram. I gather the cost of extending the family rate of the child tax credit to twins is £5 million—the Secretary of State confirms that by a hand gesture, and I do not think that he gestured £2 million. That would be a small thing to do. My hon. Friend the Member for Guildford (Sue Doughty) is campaigning for that and I hope that the Government do something about it.
	The nub of the issue is what is the right thing to do about tax credits. I draw a distinction between the tax credit strategies for people of working age and of pension age. The Conservatives and the Liberal Democrats take the view that for people of pension age there is an alternative to targeting poor people, using age rather than income as a proxy. However, there does not seem to be an obvious alternative for people of working age. The only difference between people who are poor with kids and people who are rich with kids is that the former are poor. Using income to target support is probably the only thing we can do.
	There are simple ways and complicated ways to do that and aspects of the system could be streamlined, but we must support giving extra help to lower wage families with children. That is why we did not vote against the Tax Credits Bill and we do not oppose the principle of tax credits. When I asked the hon. Member for Havant about his policy, he said that it was about undoing administrative problems. He mentioned social fund loans, which is one part of the motion that causes me a problem. We really have to get that sorted out. I should like the Inland Revenue to devote all its energy to sorting out the outstanding cases. By the time a new system is properly implemented, we could have dealt with the problem.
	The hon. Gentleman said that the policy included extending the deadline, which is, of course, right, but that does not change the fundamentals of the scheme, save to compensate people when it has gone wrong, which is also right. Bizarrely, hon. Members do not differ on the fundamentals. Whenever I have pressed the hon. Gentleman, who is always a good sport and responds in debate, it is clear that we are talking about a difference of degree, not a difference of principle, however he may want to dress it up. He did not vote against the Tax Credits Bill either.

Roger Casale: The hon. Gentleman is right to emphasise that hon. Members on both sides of the House want to improve the administration of tax credits for our constituents, but in the weekend magazine of the Financial Times on 12 May 2001, the hon. Member for Havant (Mr. Willetts) said:
	"But most of all I want an end to the ludicrous tax credit system Gordon Brown has introduced, which was a failed idea from the 1970s."
	Does the hon. Gentleman really believe that the hon. Member for Havant has changed his spots?

Steve Webb: I am intrigued by that quote. I will not leap to the defence of the hon. Member for Havant. We look forward with great interest to the Conservative party manifesto on that subject.
	The key issue is where we go from here. Clearly, the system has been a shambles. The Department must take on board the serious point that the image of telephone-based claiming has suffered a huge dent.

John Barrett: Does my hon. Friend agree that being advised on the telephone that a good time to call for advice is when "EastEnders" is on is not something that the general public should expect from a Department?

Steve Webb: I am sure my hon. Friend is right. It may have been good advice, but it is not the sort of advice that we would expect.
	It is a serious point. The image of telephone-based claiming has suffered a huge dent and the public will not trust the Government on it. The fact that that is to be the centrepiece of the pension credit strategy is worrying. I hope that the Secretary of State for Work and Pensions offers us better assurances that the telephone infrastructure for that credit will be quantitatively and qualitatively better.
	Where do we go from here? Surely we need a period of stability. The Paymaster General and the Inland Revenue have apparently blamed the victims, criticising people for failing to claim before the January deadline—I am not sure how well publicised that deadline was—something that has changed its name half a dozen times in the last four years. It is hardly surprising if people cannot keep up with all the changes. That is why we need stability, with no major overhauls, no name changes and no complete rewrites. Let us give the system a chance to settle down and give people a chance to get familiar with it. Stepping aside from the point scoring about administration, which has been a shambles, I suggest that if we are to deliver a better system, the moral of the story now must be, "Leave it alone."

Anne Begg: Over the past few months I have been very critical of the administrative introduction of tax credits. I first raised the matter on 14 April at Work and Pensions questions, following many phone calls to my office by constituents whose money had not been paid into the bank at the end of the previous week, when they had expected it. I also took part in a Westminster Hall debate secured by the hon. Member for Caernarfon (Hywel Williams), and I was critical of the administrative problems that were being experienced. I have to ask the Conservative party, however, why it is having this debate now, just when things are getting better and the system is on the mend. Where were the Conservatives in the early days when there were serious problems with the introduction of tax credits, that the Treasury has been at pains to sort out?

Andrew Selous: The reason for the debate, and its focus, is the deadline for claims, which has been referred to several times. If the Government would simply extend the time within which people can claim tax credits, many of the problems would be solved, so the timing of the debate is relevant.

Anne Begg: I am busy looking at the motion before the House, and I can see no reference to that. In fact, according to the motion, the solution would be for
	"the Government to set up a system of emergency Social Fund loans to people who are still waiting for the correct tax credit payment."
	The hon. Gentleman, who serves with me on the Work and Pensions Committee, is all too aware that the social fund is not held in high regard by anybody—apart from the Tory party, which is holding the social fund out as the solution to this problem. I was interested to hear the hon. Member for Northavon (Mr. Webb) say that we should stay where we are and get this problem sorted out. He admitted that this is a good system, and that is what I want to say tonight.
	This is an excellent measure. Tax credits were the right policy decision. Money is going into the pockets of families who desperately need it, and we should not be deflected from the system's importance to many of our constituents by the fact that it had a number of administrative hiccups in its early days.
	I would like to know whether a Conservative Government would ever have undertaken such a huge anti-poverty strategy. In one fell swoop, this Government have tried to bring all families with children into a system that would give them a great deal of money. Perhaps even the Conservatives would have found that, logistically, it is difficult to introduce such a system, and hiccups are inevitable. I do not deny that there were hiccups—I know how many phone calls my office received. I have to say, however, that, rather than continuing or even slowing to a trickle, those phone calls have now dried up. After my last speech on this subject in the House, I wrote to all the constituents who had contacted me and asked them to get back in touch if they were still having problems, and none did.

Paul Farrelly: My hon. Friend and the House may be interested to hear that despite all the sound and fury on the subject, I have been contacted by only eight constituents who have experienced delays in their payments, and all those problems were fairly easy to sort out.
	My hon. Friend will know that for years and years there has been much comment on the common sense in integrating the tax and benefits systems, and I note that the Conservative party has not said that it would reverse that move. On the point about encouraging people into work, my hon. Friend will be as mystified as I am by the Opposition's comments. I well remember their policy on incapacity benefit—

Mr. Deputy Speaker: Order. The hon. Gentleman has made enough of a point.

Anne Begg: It is hypocritical and outrageous of the Conservative party to hold this debate, and some of its allegations are simply wrong. The hon. Member for Havant (Mr. Willetts) dismissed the comments of my hon. Friend the Member for Dumfries (Mr. Brown), who said that his local Inland Revenue office had been excellent in providing interim payments. My hon. Friend is absolutely correct. It is certainly true of the Inland Revenue office in Aberdeen. That has been far more effective in helping to get interim payments into the hands of my constituents than any new scheme for loans through the social fund would be.

Annabelle Ewing: The fact that interim payments have been made in some cases is extremely helpful, but in many cases, including those in which such payments have been made, my constituents and others have incurred out-of-pocket expenses. Does the hon. Lady agree that the Government should confirm unequivocally tonight that they will pay compensation where out-of-pocket expenses have been incurred?

Anne Begg: I am not sure how easy it would be to prove that such expenses had been incurred, which may explain the Government's hesitancy. The important thing is to get the scheme sorted out. I am sure the hon. Lady will agree that it is a good system, putting large amounts of money into the hands of people who need it.
	Therein lay part of the reason for the phone calls to my office. People who had been in receipt of the working families tax credit had got used to that level of income, and therefore found it distressing when payments were not made. If it had been a matter of a couple of pounds a week, or even £4 or £5 a week, they would not have been in such dire straits. But the sums in question were £60, £70 and sometimes even more a week. I had a constituent who qualifies for the disabled element of the working tax credit. For her as a single woman, that means £50 difference in her weekly income. Not receiving such a large sum created a gap in the income of the families affected. I am glad to say that those families are now getting paid and will continue to get paid. Once the scheme is up and running, it will be much easier to ensure that any new families coming into the system are paid correctly in the first place.

Roger Gale: A few moments ago, the hon. Lady referred to outrage from Opposition Members, and implied that it was synthetic. She must understand that the pain felt by our constituents was felt by us in representing them. I pay tribute again to the civil servants in the Paymaster General's Office, who tried very hard to sort out some extremely difficult cases. The fact remains that those people were out of pocket for a considerable time and ran up debts as a result. If the Inland Revenue is owed money by any Member of the House, it will charge interest on that. Does the hon. Lady seriously suggest that the people who suffered as a result of the introduction of the tax credit system should not receive compensation from the Inland Revenue?

Anne Begg: I have not disputed the assertion that the introduction of the scheme caused difficulty for our constituents. I was one of the first to raise the matter in the House. However, I found it outrageous that the hon. Member for Havant said that he was not against the principle. He seems to have undergone a Damascene-like conversion and suddenly thinks that tax credits are the best thing since sliced bread. He went on to say that all the problems were the result of policy decisions made by Ministers, whereas in fact the problems have been administrative and logistical. There is nothing wrong with the policy. It is a good one that is putting money into the pockets of families in all our constituencies.
	I suggested earlier that if the Conservative Government had tried to introduce as radical an anti-poverty strategy as the tax credits scheme, they too might have encountered difficulties. The more I think about it, the more I realise what a short memory the Opposition have. I remember the problems of the Child Support Agency at the time when I was elected in 1997. The CSA had been established the previous year, and it was not a case of a flood of complaints that tailed off to nothing as the system got sorted out. When I was elected in May 1997, the first thing that hit me was the number of CSA cases that I had to deal with, and that went on week after week. As my constituents realised that they had a new MP and learned my name, the number of complaints went up. It took some time before the parliamentary hotline was set up and helped to solve some of those cases.
	I understand that there were also problems when the disability living allowance was introduced. I do not criticise the DLA—it is an excellent allowance which helps disabled people, but the National Audit Office was extremely critical, as was the Social Security Committee, about its introduction. What outrages me is the shortness of some Opposition Members' memories in thinking that it is always possible to introduce such major reforms completely hiccup-free. I wish that that were so and that we did not have problems with the IT systems. I suspect that anybody who could think up an IT system that could deal with such large numbers without such a hiccup would make a great deal of money. Obviously, EDS has not done that, but someone else out there might be in a position to bid.
	I worry about the tone of debates such as this, which can undermine the good work that has been done in respect of the new tax credit. There are questions about take-up, but I do not think that it has been particularly bad. Unlike the hon. Member for Havant, I did not sit back and wait for the complaints to come to my office. I made sure that every parent in my constituency was well informed about the tax credit. I suspect that that is why I received more phone calls than many other MPs and did so more quickly; people had my phone number at the bottom of the letter that told them about the tax credit. Many hon. Members actively sought to ensure that the tax credit was promoted. I suspect that, as a result, take-up is higher in their constituencies than in those of the many Opposition Members who preferred to sit on the sidelines and complain rather than do something proactive that would have helped their constituents.
	I share the views of the hon. Member for Northavon, as I believe that the system is right and that it is good, but that we need to ensure that it is delivering the money that is necessary for everyone. It is the right thing and I am proud that my Government have embarked on such a major anti-poverty strategy that has taken so many children out of poverty and will continue to do so in years to come. This one measure has probably taken more children out of poverty than any other measure introduced by any other Government. That is something to be proud of and we should not be nit-picking about it. The Government will have my wholehearted support in the vote.

Andrew Lansley: Unlike many speakers so far, I am not habituated to discussion of social security matters and tax credits in particular. I come to the debate mainly because of one issue of principle that I find surprising, which has been raised by my hon. Friend the Member for Havant (Mr. Willetts) and the hon. Member for Northavon (Mr. Webb), and an issue of practicalities relating to one of my constituents that has again been raised by other hon. Members.
	The issue of principle is the fact that, as my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) pointed out, we meet today at the point at which applications for the tax credit will no longer be eligible for backdating for the whole year. Instead, a moving three-month window will be available. As the hon. Member for Northavon rightly said, that is a consequence of the transfer into the tax system of a benefit rule, and I find it very surprising.
	My hon. Friend the Member for Havant and the hon. Member for Northavon made an important point in asking about that limit. I do not understand why it is necessary that that particular limit should be placed on claims. As my hon. Friend said, and as has been pointed out during the debate, on the face of it, 700,000 potential claimants have not made a claim. On the basis of the Government's figures, there are 7.2 million families with children, 6.5 million are reckoned to be eligible, 4.5 million have applied and 1.3 million will be migrated from income support and jobseeker's allowance. Thus, there are 700,000 potential claimants, so the question is: what will happen to those people as the three-month window moves on and their claims come in? What proportion will not have made the protective claims that people are advised to make? With the best will in the world, despite the £12 million that the Government spent on advertising and the efforts of Members of Parliament and others to encourage people to think about the potential of available family tax credits, it is clear that about 700,000 people have not made that claim.
	The Government should recognise the difficulties that have arisen. Some of the administrative difficulties that are spoken of have not been overcome with the passage of time: they have had a deterrent effect on those who might otherwise have made claims, but felt—Conservative Members may be more prone to express it in these terms—that it was just another case of the Government putting a whole load of bureaucracy and administration in the way of people's ability to secure benefits.
	What will be the situation of people who did not make claims, and why is it necessary for the three-month cut-off to be applied? If the tax credits system is genuinely part of the tax system, as we are told that it is, the year's income is the relevant consideration in relation to the application for credit, and particular circumstances should not necessarily be relevant. In that sense, it is not like the old family credit, which, like the benefits system, was geared towards particular circumstances at one time, as distinct from the financial year income of the family as a whole.
	I want to join other hon. Members in pressing the Paymaster General not to attempt the rather curious argument that was advanced by the Secretary of State, and which had little basis. Anybody making a claim for family tax credit has to supply information relating to a change in circumstances during the year in any case. Only those who have made a protective claim and do not think that they have a chance of anything other than a nil award would have any reason not to make additional information available. People have to make additional information available in order to be able to update and carry forward their claim. I cannot see why the Government do not accede to the argument, which has been strongly put, that far from closing the door on applications and claims at midnight tonight, they should, as the Chairman of the Select Committee on Work and Pensions suggested, open the door to claims to the end of the year. The logic of the system is that it should be open right through to the point at which one makes a tax return for the 2003–04 financial year, since the claim relates to that income. That time scale is also logical for applicants who are self-employed.

Tom Harris: Does the hon. Gentleman see any contradiction in the fact that he is calling for an extension to the deadline, while his party has, at best, an ambiguous approach as to whether it will support tax credits in its next election manifesto?

Andrew Lansley: I do not subscribe to the hon. Gentleman's premise. As the hon. Member for Northavon made clear, the legislation passed through this House without a contrary vote on our part. We are all in favour of the application of the tax credits system. My point—here I speak entirely for myself—is that if it is to be moved it into the tax system, it should acquire the characteristics of the tax system. That is exactly the kind of question that arises in relation to independent taxation. A benefit has been moved into the tax system, with the consequence that, for a large number of families with two earners, what was previously independent taxation has been given away in pursuit of the structure of tax credits. In the past, children's tax allowances likewise depended upon the calculation of both parents' income, and we moved away from that in order to secure independent taxation. What is important is the structure by which objectives are delivered. I have no difficulty with the objective of trying to follow through the logic of the tax credits system in the way proposed.

Dawn Primarolo: The hon. Gentleman touches on an important point, and I am listening carefully to his remarks. He is now contradicting himself, however, and I want to bring him back to the purpose of the tax credits system. It was not created as a system to move social security benefits into the tax system: rather, it is a completely new framework that takes the best that both systems offer so as to integrate into the tax system the best way to support families.

Andrew Lansley: The Paymaster General knows that I am keen to support families. Perhaps I should declare an interest, although I will not benefit from the structure that we are discussing. I have always favoured supporting families with children through the tax system. If we have found the best way of doing that, all well and good, but I have always favoured universal support through the tax system for those who are responsible for raising children. Child tax allowances had the advantage of not depending on means-testing. If my hon. Friends on the Front Bench and I were pursuing policy issues in the debate, we would discuss the extent to which the credit should be available either as a universal benefit—child benefit—or a tax allowance, which is not means-tested apart from being part of a normal tax return. The Government have chosen something in the middle. However, we are here to debate not the policy—the motion is not about that; the hon. Member for Glasgow, Cathcart (Mr. Harris) lured me down that path—but the way in which the system works. My hon. Friend the Member for Havant led the debate in that direction.
	I want to consider the case of a constituent, to whom I shall refer as Mr. A to protect his privacy and that of his partner. If the Paymaster General wishes to pursue the matter, I can give the name and details later. I wrote to the chairman of the board of the Inland Revenue on 11 June about the subject, and the Paymaster General can find out about that later if I give her further details. I have not yet received a reply but I am happy to raise the case as a point of principle; I do not expect the Paymaster General to give a substantive response this evening.
	The hon. Member for Northavon commented in detail on the way in which awards are made in the first place. Mr. A and his partner supplied information to support their claim. On 16 April, they received an award from the Inland Revenue. They were told that, in relation to the information that they had given—they had two qualifying children and an annual income of £22,316—they would receive a child tax credit of £3,436.74 and a working tax credit of £3,649.02. On 17 April, the first two payments of £139 arrived in their accounts. They thought that that was prompt. A further payment of £51 arrived a fortnight later and they were a little less sanguine about that. They did not know what would happen next because the figure did not appear to fit the pattern of payments that had been disclosed to them in relation to Mr. A's employers. Then everything went quiet.
	At the end of May, after what they described as hundreds of attempts to get through to the helpline, they succeeded. They spoke to a helpful person who said that he would check the figures and send out a revised award because, in his view and on the information that he was given, the figures were clearly wrong. My constituents raised the matter with me and when I contacted the helpline, I was told that their award was £701.50. Hon. Members can imagine their dismay. If they had known more about the system, they would have realised that the original figure was untenable. It was clearly based on the assumption that Mr. A's partner had no income. She had an income, which had been disclosed and included in the figure that was cited in the original award letter to Mr. A. However, the computer did not take account of Mr. A's partner's income.
	That example encapsulates some of the issues that hon. Members have raised in the debate. My constituents relied, perhaps unwisely, on large payments that they were anticipating on the basis of the award that they had received. They now find that they will not receive those payments.
	More as a point of principle than in relation to that particular case, I want to know what will happen and what will be the structure for dealing with those people who have relied on information from the Inland Revenue. They have not received a large sum of money that will be clawed back, but they have incurred costs and in repaying them they will incur additional bank costs as they try to recover their position. They may have incurred debts on the basis of what they anticipated to be the case.
	I do not want to delay the House any longer. I have raised the point of principle as I see it and a particular practicality on behalf of my constituents. The Secretary of State talked about administrative inconveniences and the like, while the hon. Member for Aberdeen, South (Miss Begg) talked about administrative hiccups. In practice, as Members of Parliament we all know that things have been worse than that. My hon. Friend the Member for Havant set that out clearly.
	The point is that there are things that the Government could do today to remedy the situation and there are issues that they must resolve now, which will help some of our constituents who are in difficulties. If the Paymaster General can tell us how she will help to resolve those issues, I will be interested to hear it.

Tom Harris: I am grateful for the opportunity to take part in the debate because the fight against poverty—the need to fight against it—was for me, as well as for many people of my generation, one of the primary motives for joining the Labour party 20 years ago. I am sure that that is the case for many of my colleagues.
	When I found myself in the pleasant situation of becoming a father 11 and a half years ago, I suddenly realised that the fight against child poverty was probably the most important factor within a general fight against poverty. I am sure that other Members found that to be the case when they became parents and I feel very strongly about it, as do Members on both sides of the House.

Annabelle Ewing: The hon. Gentleman mentions the important issue of child poverty. Is he satisfied with his party's record over the past six years? We have had a Labour Government, but still one child in three in Scotland are brought up in poverty.

Tom Harris: I am delighted that the hon. Lady has mentioned that. During the 2001 general election, there was some controversy, which she will remember, about the Government's claims for the number of children who had been lifted out of poverty. Opponents also made claims about that number. Last year, the Institute for Fiscal Studies pointed out that even if the lower estimate of 750,000 children lifted out of poverty as a direct result of Government policies is accurate—I am prepared to believe the Government's view that the figure is significantly more, but let us give our detractors the benefit of the doubt—that is a record high for any Government.
	People have previously been lifted out of poverty simply because of economic growth, but that has never happened on such a scale as a direct result of anti-poverty policies. [Interruption.] The hon. Member for Perth (Annabelle Ewing) asked me a direct question, so I will give her a direct answer: I am extremely proud not only that this Government have done so much for poorer families, while she and some of her colleagues simply snipe from the sidelines, but that we have established an ambitious target for abolishing child poverty.
	To the Opposition, that target is simply a hostage to fortune, as many Government targets seem to be. To me, it is not a hostage to fortune, but a constant reminder that we as elected politicians have a responsibility to deliver for the people we represent. If we still have some way to go 20 years on from the target being set or if we have not quite made it, I will still be proud of the fact that we made a bold statement and set a bold ambition to reduce and remove one of the most terrible blights on our society. The Labour party is the only party ever to have made that commitment.

Anne Begg: It is not just a question of the work that the Government have done in raising children out of poverty. Under the working families tax credit, one category of person—the single person—was left out, so that when in work, they were sometimes not any better off than if they had been on benefit. Does my right hon. Friend—my hon. Friend, rather—accept that the working tax credit closes that gap, so that work will now always pay for everyone?

Tom Harris: I am grateful to my hon. Friend for referring to me as her right hon. Friend, but I am also grateful to her for making that entirely accurate point. That is the exact point of this Government's tax credit strategy: to make work pay.
	I am disappointed by the Opposition motion because, like the previous motion that we discussed, it is all about process: it is a way to enable the Conservatives to attack the underlying principle without actually saying as much. For example, they attack the policy of targets in the NHS when what they actually want to do, but cannot do, is to attack the NHS itself. On this occasion, what they really want to do is to undermine the whole principle of the tax credit system, but they do not want to do so overtly, so they attack the administrative errors and delays that have occurred since the child tax credit was introduced. That is a dishonest way to approach this policy.

Mark Prisk: I should like to correct the record: our concern is more than just process, as the hon. Gentleman describes it. Does he accept that 1 million people not being paid is a question of more than just process?

Tom Harris: I am more than willing to point out to Ministers that I am of course unhappy with any delays that affect my constituents, but the hon. Gentleman must understand that the debate as presented by Conservative Members does not look like wholehearted support for the tax credit strategy; it looks far more like an attempt to undermine the principle of tax credits and of trying to fight child poverty, which should be—and is—a priority on the Labour Benches.

Roger Gale: The hon. Gentleman may not know that those of us who are sad enough to have been brought up on "Yesterday in Parliament", rather than on "Listen With Mother", can remember that it was in fact Anthony Barber, a former Tory Minister, who first mooted the possibility of negative income tax, which is in fact what this initiative amounts to. The Conservative Government of the day did not introduce it because the computer did not exist that could handle it. Since then, nothing much seems to have changed.

Tom Harris: I disagree with the hon. Gentleman—quite a lot has changed, and I should also point out that I never listened to "Listen With Mother"; being of a slightly younger generation, I watched "Watch With Mother". What has changed is the nature of the Conservative party. I see very little support for the progressive tax policy that the hon. Gentleman refers to among today's members of the Conservative party.
	I mentioned earlier that I share the concern of my constituents at delays in the payment of their child tax credit. I shall give the example of Mrs. A—I doubt whether she is the wife of Mr. A, the constituent to whom the hon. Member for South Cambridgeshire (Mr. Lansley) referred—who contacted me only two weeks ago. She gave a long explanation of when she applied for the tax credit and what her circumstances were, including that she was a working single mother. I rang the helpline for MPs and I discovered that she was about to be paid—a cheque was literally in the post—more than £1,000, and that she would receive £90 a week thereafter.
	It is very rare that, as a Member of this House, one gets the chance to contact a constituent with good news. I did indeed ring my constituent, and it was interesting to note her reaction. She did not say, "Well, that's ridiculous. Why have I had to wait this length of time? The system is a mess." She was extremely happy that I had phoned to tell her the news, and she was delighted that the payment had finally been cleared. I apologised to her on the Government's behalf for the delay and for the inconvenience to which she had been put, and it was only right that I should do so. But as a recipient of this tax credit—she is extremely glad to be a recipient—she has every right to claim the money. It should have been paid much earlier, and I hope that we do get the system sorted out so that no more of my constituents have to suffer such delays.
	Every hon. Member must surely recognise that one of the biggest problems that elected politicians must face is the benefits trap. That was especially true in the 1980s and early 1990s, but it continues to a certain extent. Politicians, think-tanks and Governments have tried for many years to figure out a way around that trap and how to make work pay. The combination of the new tax credits and the working families tax credit is the first realistic and serious attempt to find that way. I shall come later to the Conservative record in Government, but there certainly were not many attempts to circumvent the problem between 1979 and 1997.

Paul Farrelly: Before my hon. Friend gets round to the Conservative record, does he agree that they did not seem to give a damn whether people were trapped in benefits so long as they were kept out of the unemployment figures?

Tom Harris: Whether or not "damn" is parliamentary language, I have no idea, but that is absolutely true. We have to ask about value for money. Is it value for money to spend billions of pounds to prop up the unemployment figures, as the Conservatives did in the dreadful 18 years between 1979 and 1997 when social security spending increased by 90 per cent. in real terms—that is, after inflation? The Conservatives are always telling us that we should search for value for money. Is spending that kind of money on propping up economic failure a good use of money?

Andrew Turner: It is a pity that the hon. Gentleman, and some of his hon. Friends, use these debates to attribute the worst of motives to people on the other side of the House. We are prepared to attribute the best of motives to those who sit on the Government Front Bench. It would be nice if the hon. Gentleman reciprocated. I remind him that one key objective of the social security reforms introduced in the mid-1980s was to ensure the abolition of what we called the poverty trap. If he regards an increase in social security spending as a failure, what does he call the increase in spending through the tax credit system?

Tom Harris: I disagree absolutely. If the hon. Gentleman wants to get into a debate about whether the Conservative party—in the past and perhaps not now, although that remains to be seen—was genuinely concerned about child poverty, I have to say that if something looks like a duck, sounds like a duck and walks like a duck, it probably is a duck. Under the Conservative party, one in three children lived in abject poverty and one in five households had nobody in full-time employment. In 18 years, the Conservatives did not come up with a single policy initiative. The reason, I must suggest, is that they thought poverty a price worth paying for the prosperity that a minority in the country were enjoying.
	Before the intervention, I was asking about value for money and whether it was better value to spend billions on propping up unemployment or to use the same money to invest and encourage those on benefits to go into work. I should have hoped that the Conservatives would support that principle, and I should be happy if they prove me wrong to think otherwise.
	We do not want the debate to go wider than the Opposition motion, but an anti-poverty strategy can include all sorts of measures. For example, the Conservative party, until a few years ago, opposed the national minimum wage. I find it fascinating to see the Conservatives trying, as we speak, to work out whether they support the tax credit agenda. I hope that the hon. Member for Hertford and Stortford (Mr. Prisk) will say categorically whether they do. He might add to the list of, I think, three policies that the Conservative party has. He could make it four by saying unambiguously whether or not they will support the child tax credit, even though I am sure that they would want to make all sorts of modifications. It is very important, if we are to take the Opposition motion seriously, that we know exactly where they stand on the child tax credit. I am sure that the hon. Member for Havant will be able to elucidate.

Paul Farrelly: Does my hon. Friend agree that it is hard to ascribe the best of motives to the Conservatives, as the hon. Member for Isle of Wight (Mr. Turner) suggests we should, when they opposed the minimum wage, which is a necessary guarantor of a decent income for families?

Tom Harris: Absolutely. With 5.5 million families claiming and benefiting from the child tax credit, it is outrageous that there is any ambivalence at all about it on the Conservative Benches. Shortly before the last general election, the hon. Member for Havant said that a Conservative Government would scrap the tax credit system. The House needs to know whether that promise still holds.

Andrew Selous: Like many others tonight, I have constituents who have had difficulty in accessing tax credits, but rather than dwelling on that point I want to consider some other aspects of this subject. It is the function of an Opposition to point out what has gone wrong in the implementation of a Government policy, and we have heard about some completely unacceptable situations in relation both to individual claimants and to staff in Inland Revenue offices. In Luton recently, where the main Inland Revenue office that serves my constituency is, there was a queue of about 600 people outside the building, because the staff were so frustrated at being unable to process claims that they had literally given up.
	I raise this matter not merely to carp about the Government having got something wrong—we can all recognise that the implementation was not good—but because there is a huge and genuine issue about the implementation of vast new Government schemes involving complex information technology. Sitting on the Work and Pensions Committee, I heard with absolute horror last week about the new computer system for the Child Support Agency, which is going horribly wrong for the second time. Committee members of all parties would have preferred to hear that everything was going well, that the new system was in place and that the reforms could be implemented immediately, but that is very far from the case.
	The hon. Member for Northavon (Mr. Webb) spoke about what it will be like when the pension credit is introduced later this year, and he was right to do so, because our experience with tax credits, and now for the second time with the Child Support Agency, has been lamentable. He was absolutely right to mention the computer company EDS, which is a massive contractor to the Government. I believe that the Department for Work and Pensions and the Treasury are among its largest clients worldwide.
	There are serious questions to be raised right across Government about the competence of Departments to handle such contracts. For example, do they employ senior members of the IT profession who have been involved on the other side of the fence in providing such contracts, who could spot what was really going on within these large computer firms as they pitch for projects to the Government? I hope that we will learn the lessons and that the Department for Work and Pensions will closely examine the role of EDS in particular.
	We have also heard a lot from hon. Members of all parties about the additional costs incurred by our constituents when tax credit payments have not been received on time, but we have not had an adequate response. Several constituents have shown me their bank statements and the additional charges that they have incurred. Some have had to face penalty charges from their mortgage companies as a result of tax credits not being paid on time. Those are highly serious problems, which have put people significantly into debt, and it may take them considerable time to recover.

Anne Begg: If compensation is such an important issue, why have the Opposition not included it in their list of requests for the Government? Similarly, the motion does not refer to the deadline, which the hon. Gentleman raised in an earlier intervention on my speech. If those issues are so important, why come up with a silly motion on the social fund, which nobody believes is credible? Why do the Opposition not make their own suggestions?

Andrew Selous: I thank the hon. Lady for her comments. One of the luxuries of being on the Back Benches is that I am not personally involved with the drawing up of Opposition motions. However, my hon. Friend the Member for Havant (Mr. Willetts) dwelt at considerable length in his excellent opening speech on the problem of the deadline and on the question of compensation for those who are out of pocket as a result of additional charges incurred after the introduction of tax credits. It is highly relevant that we are conducting our debate today—and it is one of the reasons why my hon. Friend called for it today—because it enables us to highlight the fact that the deadline occurs at midnight tonight and that many people will lose out on months of tax credit claims by failing to submit their forms by that time.
	I want us to think more about the philosophy underlying tax credits. I would certainly describe myself as a one nation Tory, and many of my hon. Friends are genuinely concerned to deal with the issue of poverty and low-income families. It is a common cause across the Chamber that those issues are important. However, speaking for myself rather than for Front Benchers, I want to raise a few questions about the philosophy behind tax credits. My worry is that the measure will be widely welcomed this year and in the immediate future as a result of the extra income that it puts into our constituents' and families' pockets, without taking account of a couple of difficult philosophical issues that relate to the question.
	What, for example, will be the effect on the incentives of people in work, once they realise that there is virtually nothing that they can do by their own efforts to improve their financial position? That is a huge issue, which has not been touched on tonight and does not appear in the motion. People interviewed just after the announcement of the introduction of tax credits were understandably pleased about the boost to their incomes, but they were honest enough to say that they realised that there was nothing that they could do by the result of their own efforts to improve their family's position. I worry about that, because it amounts to an additional form of dependency, which will have a great effect on incentives and the working of our economy.
	I also worry about the possibilities for fraud under the scheme. When family credit was introduced—under my Government—some firms set their salaries at a low level and in some cases employers drew out considerable amounts of cash. There was good evidence of collusion between the employer and the employee to ensure that the employer paid the minimum level of wages to staff: because of the payment of tax credits, the employer could then give a cash backhander to employees. There is a genuine worry that the system will be abused on a significant scale, but we have not heard anything from the Government about the plans that they have to prevent fraud.

Anne Begg: The difference between the introduction of family credit and today is that we now have the minimum wage, which acts as a floor. One of the ways of checking whether employers are paying the minimum wage is when the Inland Revenue calculates whether the figures add up. That is how it worked for the working families tax credit. Before the minimum wage, employers could pay any amount—and often paid very low wages.

Andrew Selous: The points that I am making relate to tax credits in general and are not specific to family credit, the working families tax credit or the working tax credit. The possibility is that unscrupulous employers, in collusion with their employees, will be able to work the system.
	We need only look back at the introduction of housing benefit for an example. Members on both sides of the House widely and rightly welcomed the introduction of housing benefit. No one foresaw some of the unintended results of its introduction, which are now universally recognised. They included rising rents, increased corruption and hugely escalating housing benefit bills. Unintended consequences often occur. An innovation looks good from a short-term point of view and may be done for the best of motives—unlike some Labour Members, we at least impute good motives to the Government's actions—but it may run into the same problem as housing benefit did.
	Perhaps we need a more universal system that is applied regardless of savings. We should consider a universal child allowance, and there are other ways to cope with poverty in low-income families. It is good that we have considered the issues tonight. A proposal may look good now, but we may have to revisit it in a few years' time because it has not been fully thought through.

Roger Casale: I am grateful for the opportunity to put on record my support for an important and substantial measure that the Government have introduced, which has already benefited many thousands of my constituents. In particular, it has helped to lift my poorest constituents, especially those with families, out of poverty. Although my constituency also has many people from the professional and managerial classes, I have been struck by the wide consensus that I have found, even among the small portion of the population who are not eligible for tax credits, that they are the right thing to do.
	It is true that we have had some initial teething problems in introducing the new system, but in some ways that is to be expected when a major restructuring of the welfare state is undertaken. Those problems are being, and will be, resolved. While we must never lose sight of the human dimension of the early difficulties with the administrative system and the bureaucracy—behind the statistics are real people facing real difficulties—the system, even in its early stages, is delivering enormous and substantial benefits to many millions of people. We should remember that this Government introduced the system in the teeth of widespread opposition from the Conservatives, not when the Bill was introduced but at the last election.

Annabelle Ewing: The hon. Gentleman said that teething difficulties were to be expected. If that was the case, why was the system introduced in such a way that benefits were stopped on time yet top-up payments were not received on time?

Roger Casale: I do not know whether hon. Lady made that point in an earlier contribution to the debate. I am sorry that, owing to another commitment, I have been unable to hear all the speeches. I was making the point that we should not lose sight of the enormous benefit that tax credits are already bringing to millions of people.
	We are all concerned with the welfare of our constituents and we all take up, daily or weekly, the difficulties that they may face in accessing their rights and entitlements. That is something on which we can agree in a cross-party spirit, as has been said. However, we must not forget that there are grave and deep policy differences. Whereas my point of view, and that of many Labour Members, is that administrative difficulties—inasmuch as they exist—should be ironed out as quickly as possible so that everybody benefits from the new tax credit, some Opposition Members would quite like those difficulties to remain unresolved. Their agenda is to undermine support for the tax credit system and to take us back to the old ways.

Andrew Turner: Can the hon. Gentleman tell us who those Opposition Members are?

Roger Casale: Let us start with the hon. Member for Havant (Mr. Willetts), who led for the Opposition. As I pointed out earlier, in the Financial Times weekend magazine of 12 May, the hon. Gentleman commented:
	"But most of all I want an end to the ludicrous tax credit system Gordon Brown has introduced, which was a failed idea from the 1970s."

David Willetts: I think that that remark was made before the election of 2001. May I explain it to the hon. Gentleman, as that may help him? It was about our proposal that the working families tax credit should be delivered as a benefit to families rather than being delivered via the employer. That policy was in our last manifesto and, if I may so, that proposal, under the structure that existed then, would have ensured that no working family lost out and that the benefit was delivered better. I am pleased that the hon. Gentleman has given me the opportunity to make that point.

Roger Casale: I hope that the hon. Gentleman is sincere in his support for tax credits.

Dawn Primarolo: The hon. Member for Havant (Mr. Willetts) made an interesting clarification, but when the current Leader of the Opposition was the shadow Social Security spokesman he was much clearer. He said:
	"We would cut the working families tax credit."—[Official Report, 19 October 1998; Vol. 317, c. 951.]
	The right hon. Gentleman did not say that they would pay it in another way; he said that they would cut it.

Roger Casale: I am grateful to my right hon. Friend for that intervention. I am sure that she, like me, will need much more convincing about the sincerity of Opposition Members, including the hon. Member for Havant, in their new-found support for such measures. What I remember, and what my constituents remember—

David Willetts: The hon. Gentleman has mentioned me for a second time, so I am grateful to him for giving way again. We introduced the family credit in 1988. If I may say so, I played a modest role in its creation—[Hon. Members: "It was not modest."] Okay, it was a very important role—it was central. The family credit of 1988 was a device precisely aimed to boost the incomes of families in low-paid work. It was the great Keith Joseph who introduced the original family income supplement, which was the first example of such a scheme, so I do not know why the hon. Gentleman is so baffled that Conservatives believe in it. We have a solid track record of proposing such arrangements.

Roger Casale: It is very clear to me that, however many times I mention the hon. Member for Havant, it will never top the number of times that he mentions himself.
	At least one other hon. Member is waiting to speak, so I shall conclude by saying that the Conservatives would be a lot more credible if they told the House how they see their support for tax credits as part of the wider vision, which the Government have, for improving the condition of people in this country, alongside the national minimum wage and many other measures that have been opposed by the Conservatives. If the Conservatives want to be more credible in their support for tax credits, which they say that they would continue if they were ever returned to power, they also have to explain to the House how they would pay for them. That has not been mentioned in the debate. The tax credits involve a major redistribution of wealth and income, but the cost to the Exchequer is £13 billion, and the Conservative party has to explain where it would find the money to continue with the current tax credits, given that it aims to cut expenditure on public services by 20 per cent.

Tim Loughton: The hon. Gentleman said that there was a teething problem with the child tax credit. What does he have to say to one of my constituents, who has had to give up her part-time job working for a local authority, because there was a complete Horlicks over the payment of her child tax credit, which had an impact on her child minder, who also did not receive her child tax credit and did not get paid by the original person, so there was a double whammy? That does not sound like a teething problem to me; it sounds like serious root canal damage, courtesy of the Government. Will he apologise for it?

Roger Casale: If the hon. Gentleman's constituent is in receipt of tax credits, I would invite her to consider whether her tax credit would be safe if the Conservative party were ever returned to power.
	In the brief time remaining to me in the debate, let me explain why I support tax credits. First and foremost, tax credits are already transforming people's lives; lifting families, especially those with children, out of poverty; and lifting the stigma of benefits by integrating credits with the tax system, thus rewarding and incentivising work. Secondly, as well as being better in principle, tax credits will represent a better way to deliver benefits in practice. More money will go to more families. The system will be more flexible and more likely to generate the kind of dynamic gains that we want in our economy, by rewarding work.
	When I was first elected in 1997, social security spending in this country had increased from £45 billion to £90 billion; child benefit had been frozen for three years, cutting it in real terms; and record numbers of families and children lived in poverty. The damage done by that economic and social policy will take many years to repair, but I am proud to support the Government and the introduction of tax credits, under which, today—six years later—families with children are £1,200 per annum better off in real terms; households with children in the poorest fifth of the population are £2,500 a year better off in real terms; and a single-earner family on half average earnings, with two young children, is £3,400 better off.
	We will overcome the difficulties. There is always a human side to any administrative problem. We all want to fight for our constituents, but tax credits are already making an enormous difference to people in this country, and I am delighted to speak in the debate to show my support for them.

Hywel Williams: We know that millions of people have been awarded tax credits and that it has been a great help to them. I have no problem with commending the Government for that, and nor do I have a problem with commending them for the operation of the Welsh language call centre, which has been a great boon to my constituents. But many people, through no fault of their own, are not getting the tax credits. Real hardship persists, which has been caused, let us be clear, by the botched introduction of the system. It was a botch foretold.
	Like all hon. Members, I have come across many tax credit cases, some of which I outlined in the debate in Westminster Hall on 4 June. I will be brief, but those cases concerned such familiar matters as simple mistakes as to material facts, mistakes in the level of awards and applications disappearing from the electronic records. When EDS was mentioned earlier, I wondered whether it might stand for "every decision a shambles," although that would be unkind and probably untrue. There have been difficulties with mechanical reading of forms, extreme difficulties in getting through on the helplines, and, interestingly to me, a claim held back because the address was "wrong"—in fact, the address was in Welsh.
	I will not elaborate further; rather, I refer hon. Members to the debates of 4 June—although perhaps you will indulge me, Mr. Speaker, if I repeat just one short anecdote. I wrote to a constituent about her problems with a straightforward claim for tax credits. That letter was in Welsh. When I printed it out, I pressed the spell checker by mistake—the English spell checker. The first correction suggested to me was to replace the Welsh word "credyd"—credit—with the English word "cruddy". That was indeed a flash of brilliant insight by an inanimate object, and an insight that sometimes seems to elude the Government.
	The proof of the tax credit system to my constituents is that it is got right for 4.2 million people but that it is got wrong for many others. We want to know what is the extent of getting it wrong. What is being done to get it right? Who is responsible for the mistakes? Are they being held to account? If they are external to the Revenue, are they making recompense for their mistakes? What lessons are being learned for the introduction of the pension credit?
	For some people at least, the tax credit system is not proving to be a means of getting back into work: it is proving to be yet another obstacle to getting back to work and staying in work. Those people have not been getting the money on which they depend. In effect, they are having to subsidise the Government's failings, which they should not have to do. They cannot afford to subsidise the Government's failings. Children in lower-income families cannot afford to subsidise the Government's failings. I have asked the Paymaster General how many claims are still pending that were submitted before 4 April. I have had no answer.
	Briefly, on compensation, the Inland Revenue publishes a code of practice entitled, "Putting things right when we make mistakes"—fascinating reading.

Patrick Cormack: In Welsh or English?

Hywel Williams: Both. It states that it will pay back reasonable costs that a taxpayer or tax credit claimant incurs as a direct result of its mistake or unreasonable delay. The document also says that extra compensation will be paid for distress, and states:
	"If our actions have affected you particularly badly, please let us know"—
	if can get through. It continues:
	"We may be able to pay you an amount of compensation to acknowledge and apologise for the way we have treated you. These payments, which are not intended"—
	"not intended"—
	"to put a value on the distress you have suffered, will usually range from £25 to £500."
	An amount of £25 is not enough. We want the upper limit extended, and my party and my hon. Friends are also calling for a fast-track system to handle such complaints.

Mark Prisk: It is fair to say that after an excellent speech by my hon. Friend the Member for Havant (Mr. Willetts), we have had a useful and instructive debate. Despite what Labour Members have said, we have of course been trying to review the implementation of the tax credit system and consider how it works in the real world rather than in the minds of some Labour Members.
	Despite the entertaining though largely irrelevant rant from the Secretary of State at the beginning, we had a number of positive contributions. As usual, the hon. Member for Northavon (Mr. Webb) brought his forensic approach to complicated subject, and he was accurately supported by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley). The hon. Member for Aberdeen, South (Miss Begg) made a typically positive speech, although it was disappointing that her colleague, the hon. Member for Glasgow, Cathcart (Mr. Harris), was untypically churlish.
	The way in which my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) tried to describe the problem from a constituent's point of view was especially accurate, and we heard a typically loyal speech from the hon. Member for Wimbledon (Roger Casale). [Interruption.] I am delighted that the hon. Member for Glasgow, Cathcart has finally joined us in the Chamber. We heard a strong and amusing yet important speech from the hon. Member for Caernarfon (Hywel Williams). It is important to know about the way in which the system works on the ground—that is the real issue. The theory, statistics and the attempt to distract us from the real issue are not important because we need to know how the system affects real people.
	The Chancellor boasted in a speech last year how the new tax system would "modernise welfare". The Paymaster General promised us a "seamless system" that would "respond to people's needs" and provide "continuous support". Indeed, a fascinating tome from the Treasury, which I suspect that J.K. Rowling would regard as being as fictional as her own, says that the Government would
	"facilitate a smooth transition to the new system".
	Perhaps the most bizarre claim was that they would
	"minimise the disturbance caused to families".
	How bitter those words must sound to the millions of families who have been short-changed by the Government's incompetence.
	We have heard about the gap between the Government's words and actions and how the gap has become a chasm. Instead of a seamless system, the whole policy has unravelled causing heartache and distress to millions of families. Of the 6.5 million eligible families, more than 1 million have not claimed or been paid. According to Sir Nicholas Montagu, even eight weeks on, up to 250,000 families have applied yet are still waiting for the money that they are owed. Where is the seamless system for them? Where is their continuous support?
	Hon. Members will know of many constituents who have lost out and, indeed, several examples have been outlined in the debate. I have received letters from dozens of worried families who live in my constituency who found that the system and the Government failed them. One of my constituents, a working single mum from Bishop's Stortford, made a correct claim on 5 September 2002 but received an incorrect award notice on 18 February 2003—a nought had been added to her income. She wrote back and she wrote again. She started calling the hotline and had to call again. Two months later, she had still not received an answer. She wrote a letter to me on 17 April and explained her situation in this straightforward way:
	"As a working single parent . . . I have no financial cushion to see me through until my next Tax Credit claim is processed. I am unable to pay my childminder and have had to terminate the contract . . . Without child-care I am unable to work and continue my studies. I am therefore unable to pay my mortgage and maintain house and home for my two children and myself."
	That is only one story from one constituency but it is typical of many that hon. Members throughout the House have raised in this debate and previously.
	The roots of the fiasco lie not only in poor administration but bad Government policy. Motivated in part by a desire to massage away the welfare budget, the Chancellor forced the tax credits policy forward without thinking through how it would work in practice. The first set of credits failed, so they had to be replaced—not once but twice. Indeed, since October 1999, the Government have introduced five new tax credits, scrapped four and introduced two new ones. That is an average of one new tax credit for families every six months. Given the appalling failure rate, did it never occur to the Paymaster General that there might be something wrong with the policy?
	The way in which the Government have failed on implementation has affected most people. It is increasingly clear that the Government have dumped the overly complex operation on to the Revenue with too little time and too little thought. Why did the Revenue fail to anticipate the scope or pattern of claims? What training was provided for staff? Why did the Paymaster General go ahead with a system when the computer software had not been fully tested?

Paul Farrelly: Will the hon. Gentleman give way?

Mark Prisk: I will not because I want to ensure that the Paymaster General has plenty of time to answer the questions.
	What of the infamous telephone hotline? Four weeks before the credits were due to become available, no one could get through. Indeed, one man reportedly made 2,400 attempts, only to be put on hold and then told that the form he needed would take 15 days to arrive. When that hotline was clearly collapsing, why did the Paymaster General persist with an £11 million advertising campaign encouraging even more people to call?
	In a written answer on 12 March the Paymaster General advised me that the Treasury had spent a staggering £53 million just to set up the hotline. That is an enormous amount of money for a telecentre, far more than most large commercial centres. Yet with all that money, it could cope with only 500,000 calls a week. [Interruption.] Let me tell the Parliamentary Private Secretaries, Tweedle-Dum and Tweedle-Dee, that 6.5 million families are eligible. Anyone, perhaps with the exception of the hon. Gentlemen, could have predicted that the majority would want to call in the last couple of weeks. Is it any wonder that the system broke down? Did the Minister think to ask why the capacity was so inadequate?
	What makes things worse is that Ministers were warned of the risks right from the beginning. The right hon. Member for Birkenhead (Mr. Field) said as far back as 1998 that the whole tax credit system was "fraught with great dangers". At a practical level, even the Office of Government Commerce, the Government's IT procurement experts, cautioned that the project was very ambitious. Last December, it said that the project was of a large and complex nature and would require unprecedented co-operation between Departments, and we know that that does not happen in this Government. As such, it says that the new system ranks as
	"among the highest across Government for assessed risk".
	It was quite right, yet the Paymaster General turned a deaf ear to all the warnings.
	What did the Paymaster General do to satisfy herself that those risks were being addressed prior to 6 April this year? What steps did she take to ensure that the unprecedented departmental co-operation would be forthcoming? Now, after all the stories that our constituents have told us about the difficulties that they have encountered, what steps has she taken to ensure that it will not happen again?
	For some people, insult has been added to the injury. Most people would expect that as they are out of pocket, the Revenue would pay them back in full, but that is not the case. Instead of a single cheque, people are paid in instalments. One family in the constituency of my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) is reportedly owed nearly £1,500. Instead of a single cheque, the Government are generously going to give them £37.66 a week until they get the money back in total. Given that the family had to borrow to make up the shortfall, they are, not surprisingly, less than happy. Apparently, that is possible because of a little rule, tucked away in the details. As the family claimed on 28 April, the procedure is in order, but when we check that information, we discover that it has not been provided to the public. According to a member of the Revenue staff, the reason for the staged payments is that the computers and the giro system cannot cope with paying out such a large amount at once. That is the truth of the matter.
	Did the Paymaster General sanction that rule? Will she now rescind it? Does she agree that bank charges and other penalties caused by the Revenue's incompetence are reasonable? Will she confirm that the Government will compensate such claims? Given the confusion over the deadline for making claims, will she scrap that arbitrary hurdle and let people continue to claim their money throughout the tax year?
	In its manifesto for the 2001 general election, the Labour party said that the welfare state would help people but that Labour "demands responsibility in return." Well, that works both ways. We and those we represent demand that Ministers take responsibility for their policies and for the running of their Departments. Denying knowledge is not good enough, as the Chairman of the Treasury Committee told the Paymaster General only last week. Ministers have responsibility and Conservative Members intend to hold them to it.
	The Paymaster General is responsible. She is responsible for the failure of a policy that clearly is not working, for the failure to listen when others warned, for the failure to act on those warnings and for the failure to lead on this issue rather than just follow. Above all, the Paymaster General is responsible to the millions of families who trusted this Government and who have been so badly let down. She has failed them; she has failed in her ministerial responsibilities; and it is now time that she answered for that failure.

Dawn Primarolo: Until the last contribution, the debate, including the remarks of the hon. Member for Havant (Mr. Willetts), had been a thoughtful one. As my hon. Friends the Members for Aberdeen, South (Miss Begg) and for Glasgow, Cathcart (Mr. Harris) said, the tone of the debate needs to be carefully balanced. Until the last contribution, the tone in the Chamber was one of support for the tax credits scheme. There was an acknowledgement of the need for an anti-poverty strategy, and Opposition Members expressed their support for such a strategy. Suddenly, however, we had the synthetic anger of the hon. Member for Hertford and Stortford (Mr. Prisk), who simply confirms the thoughts of my right hon. and hon. Friends that the true intent of some Opposition Members is to undermine, and eventually destroy, tax credits.
	Tax credits are being claimed by families in their millions, contrary to the predictions of Opposition Members before the system came into effect. We have about 4.5 million claims, in addition to the 1.3 million families who receive increased support for their children through income support and jobseeker's allowance. Each week, tens of thousands of claims are being made, and the number of claims in payment is steadily rising. We now have more than 4.2 million awards.
	The take-up of tax credits is a huge success, and in their first three months we put 4.2 million claims into payment. This is a major achievement in enhanced family support, which reaches far more people than the old tax credit or the other systems did. The point of these reforms is to raise children out of poverty—a proposition that Opposition Members, or at least some of them, claimed to support. However, we can see that when they were in power, Britain had the fastest rising levels of child poverty in the European Union.
	I come now to the points made during the debate. First, I want to say where we stand as of 7 July. So far, 4.5 million claims have been received. More than 4.25 million are in payment, and 186,000, awaiting further information, are still being worked on. Sixty per cent. of those claims have arrived since 1 June, and almost 50 per cent. arrived in the past two weeks. The hon. Member for Havant continues to make the accusation about the missing million. He knows full well that nine out of 10 families are eligible, which means that 5.7 million families can receive the child tax credit in 2003–04. That is no secret. The rest will receive the working tax credit, which gives us a figure of 6 million. There is no secret about the figure; it was in the Budget book—5.75 million families eligible for child tax credit and 250,000 for working tax credit only. Even if we accept the hon. Gentleman's figure of 6.5 million claims, 84 per cent. are in payment in three months.
	The hon. Member for Havant said that he had played a modest part in the introduction of the family credit. It had a 57 per cent. take-up in its first 12 months. Let us be clear—on 28 April I said that more than 4 million claims had been received and 3.2 million claims were in payment. Today, there have been over 4.5 million claims and 4.25 million are in payment.
	The hon. Gentleman also mentioned the most vulnerable groups. Let us be clear about that, too. The most vulnerable of those on income support and jobseeker's allowance are already receiving the benefit of the tax credit increases in their child premiums, and they will not be transferred to the new system until next year. There is no question of delay. Families previously claiming working families tax credit and disabled person's tax credit were all contacted to encourage them to apply. When they applied, their claims were given priority. Almost nine out of 10 of those receiving working families tax credit in March have already claimed and are being paid. Many others are among the more recent claims on which the Inland Revenue is working as fast as possible.
	The hon. Member for Northavon (Mr. Webb) and the hon. Member for Havant referred to the new framework. Tax credits are an entirely new framework, building on tax and social security rules to create an integrated system of tax and benefit. Three months' backdating strikes the right balance between allowing time to claim and not requiring people to build their history over a longer period. That is the system that will remain in place. It is better than the working families tax credit, which allowed no backdating, and it is better because the new tax credits are more generous. They strike the right balance with child benefit and in the time allowed for people to claim.
	The issue of compensation has repeatedly been raised, and rightly so. I have told the House the position. For those who have not received the service to which they were entitled on commitments from the Inland Revenue, the Inland Revenue has a process for dealing with the appropriate compensation.
	The hon. Member for Northavon asked about families without children. We expect 250,000 families without children to claim during 2002–03, in addition to the 1.1 million families with children whom we expect to receive the working tax credit as well as the child tax credit. I cannot give the hon. Gentleman a breakdown of the 4.25 million claims in payment, but the figures will be available in late August or early September, as we start to publish the figures for claims and who receives them.

Andrew Selous: Will the Paymaster General give way?

Dawn Primarolo: I should like to answer the questions that have already been asked.
	The hon. Member for Northavon asked about passporting. The Inland Revenue has been in discussion with all Departments for several months, and has published a leaflet on passported benefits covering all the main passports and giving contact details for the Departments. I heard what he said with regard to the Department of Health website and I will look into that.
	On the hon. Gentleman's question about over-payment, we discussed the matter at length in Committee. Where over-payment is known now and the claimant identifies that to the Inland Revenue, we should be able to adjust payments in-year and recover it in-year. Where over-payment is identified at the end of the year, there are several ways of recouping it—through continuing payment with safeguards, or through the PAYE code from 2005—

Patrick McLoughlin: rose in his place and claimed to move, That the Question be now put.
	Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—
	The House divided: Ayes 186, Noes 329.

Question accordingly negatived.
	Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—
	The House divided: Ayes 325, Noes 179.

Question accordingly agreed to.
	Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
	Resolved,
	That this House notes that the introduction of the Child Tax Credit is the biggest single change in support for families since the Beveridge reforms of the 1940s, and a more radical change than the introduction of Child Benefit 25 years ago; notes that the new tax credits represent the biggest ever investment in families with children, with no government ever having spent so much on children and families; welcomes the fact that 90 per cent. of families with children are eligible for the Child Tax Credit; further welcomes the fact that tax credits are now being paid to 4.2 million families; notes that in addition 1.3 million families with children on Income Support and Jobseekers' Allowance are already benefiting from the increased level of support through their benefits; welcomes the fact that 5.5 million families are therefore now benefiting from tax credits, with more and more being paid every week; and believes that these figures belie the persistent criticism that people would not claim, and that those who said that families would not apply for the new tax credits, and that take up would be low, have been proved wrong.

Eleanor Laing: On a point of order, Mr. Deputy Speaker. You and your colleagues have frequently deprecated the practice by Ministers of making policy announcements outwith this House. I understand from her published agenda that the Minister for Children is due to make a speech tomorrow to the Local Government Association on the specific subject of the Green Paper on children at risk. The Prime Minister's office announced last week that this Green Paper will not be presented to the House before the autumn. Can you use your influence to require the Minister for Children to bring her Green Paper proposals here, to be discussed by Members of Parliament, before she takes them to any outside body?

Mr. Deputy Speaker: I was unfamiliar with this case until the hon. Lady raised it. She is aware, as is the whole House, that Mr. Speaker would expect policy announcements by Government to be made in the House. Whether a Green Paper, which presumably initiates a period of consultation, is to be seen in quite the same way, is a matter of judgment, but, generally speaking, Mr. Speaker has made it clear that he expects, as far as possible, announcements to be made in this House rather than elsewhere.

DELEGATED LEGISLATION

Mr. Deputy Speaker: With permission, I propose to put together motions 2 to 6.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

Electricity

That the draft Electricity and Gas (Modification of Standard Conditions of Licences) Order 2003, which was laid before this House on 12th June, be approved.

Contracting Out

That the draft Contracting Out (Function in relation to the Management of Crown Lands) Order 2003, which was laid before this House on 11th June, be approved.

Value Added Tax

That the Value Added Tax (Finance) Order 2003 (S.I., 2003, No. 1568), dated 16th June 2003, a copy of which was laid before this House on 16th June, be approved.

Representation of the People

That the draft Representation of the People (Form of Canvas) (Northern Ireland) Regulations 2003, which were laid before this House on 13th June, be approved.

Community Care

That the draft Community Care Plans (Disapplication) (England) Order 2003, which was laid before this House on 12th June, be approved.—[Mr. Jim Murphy.]
	Question agreed to.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9)(European Standing Committees),

Additives in Animal Nutrition

That this House takes note of European Union Document No. 7505/02, draft Regulation on additives for use in animal nutrition; and supports the Government's view that the measure will enhance the protection of consumers of livestock products and rationalise authorisation procedures.—[Mr. Jim Murphy.]
	Question agreed to.

SITTINGS OF THE HOUSE

Motion made,
	That —
	(1) at the sittings on Monday 14th, Tuesday 15th, Wednesday 16th and Thursday 17th July, the Speaker shall not adjourn the House until any Message from the Lords has been received and any Committee to draw up Reasons which has been appointed at that sitting has reported; and
	(2) at the sitting on Thursday 17th July, the Speaker shall not adjourn the House until he has reported the Royal Assent to any Act agreed upon by both Houses.—[Mr. Jim Murphy.]

Hon. Members: Object.

ADJOURNMENT (SUMMER)

Motion made, and Question put forthwith, pursuant to Standing Order No. 25 (Periodic adjournments),
	That this House, at its rising on Thursday 17th July, do adjourn till Monday 8th September 2003.—[Mr. Jim Murphy.]
	Question agreed to.

BUSINESS OF THE HOUSE

Motion made,
	That at the sitting on Thursday 17th July, the Motion for the Adjournment of the House in the name of the Prime Minister relating to matters to be considered before the forthcoming adjournment may be proceeded with, though opposed, for three hours, and shall then lapse if not previously disposed of.—[Mr. Jim Murphy.]

Hon. Members: Object.

MODERNISATION OF THE HOUSE OF COMMONS

Ordered,
	That Dr John Reid and Caroline Flint be discharged from the Select Committee on Modernisation of the House of Commons and Peter Hain and Martin Linton be added.—[Mr. Jim Murphy.]

WELSH GRAND COMMITTEE

Motion made,
	That—
	(1) the matter of the Draft Public Audit (Wales) Bill be referred to the Welsh Grand Committee for its consideration;
	(2) the Committee shall meet at Westminster on Tuesday 15th July at five minutes to Nine o'clock to consider the matter of the Draft Public Audit (Wales) Bill under Standing Order No. 107 (Welsh Grand Committee (matters relating exclusively to Wales)).—[Mr. Jim Murphy.]

Hon. Members: Object.

PETITION
	 — 
	"Popetown"

Bob Spink: I have a massive petition to present. Many Roman Catholics are opposed to the screening of the BBC sitcom "Popetown" and petition Parliament as the only available option, in view of the BBC's intransigent attitude. The BBC is required in the agreement associated with its charter not to broadcast programmes that include anything that offends against good taste or decency or may be offensive to public feelings. The petitioners believe that "Popetown" is in poor taste, lacks decency and will offend public feelings.
	The petition, signed by 15,378 people, states:
	To the Honourable Commons of the United Kingdom, Great Britain and Northern Ireland, in Parliament assembled. The Humble Petition of Mrs. Stella Lilley, Mr. Edward McCabe, Mr. Francis McFadyen and others of like disposition sheweth:
	If the BBC allows the screening on Television of the animated sit-com series entitled "Popetown", it will offend many practising members of the Roman Catholic faith.
	We consider that to have Ruby Wax providing the voice of a senile Pope, albeit as a cartoon character, is in extremely poor taste and offends against a code of propriety that the BBC ought to follow.
	We believe that it is inappropriate at any time, to portray the Pope, revered as the Spiritual Leader and Head of the Catholic Church on Earth, as a cartoon character.
	Wherefore your Petitioners pray that your Honourable House shall request the Government to encourage the BBC to abandon the "Popetown" sit-com.
	And your Petititioners, as in duty bound, will ever pray.
	To lie upon the Table.

COMMON AGRICULTURAL POLICY

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Murphy.]

Oliver Letwin: I originally began to apply for this Adjournment debate when the position was somewhat different from the one that we face now. I had hoped that I might be able to withdraw my application for the debate on the ground that all the issues I wanted to raise had been resolved by a magnificent success in the common agricultural policy negotiations. I hoped that all the concerns expressed by farmers in West Dorset would have been dispensed with. It is indeed the case that some of those concerns have been resolved, but I am afraid that some remain, and in one respect this Adjournment debate has become more useful, and I shall deal with that first.
	The Minister will undoubtedly have heard a similar tale from other Members with rural constituencies, but he may be only remotely aware of what has become abundantly clear to me. Some of the farmers in my constituency acquired their farms only recently. They did so in good faith on the basis of the assumption that, whatever the general grant regime and its application to the specific form of agriculture in which they engaged—some are mixed farming enterprises, some pure dairy farms—they would receive the grant or subsidy that attached to the farm that they had bought. Indeed, they bought the farms in the expectation that that would be the case.
	The Minister will be aware of the frenzied concern among some of my constituents—and, I suspect, those of other hon. Members—when they believed that the seller of the land, depending on the date of sale, would receive the continuing subsidy under the new CAP regime and that they would not. If that were the case, some of my constituents would have been effectively pauperised, while others would have been quite uncovenantedly enriched. It is not my purpose to deprive any of my constituents of uncovenanted bonuses, but that seemed to me—and to my constituents who would be pauperised by the arrangements—to be very unfair.
	I admit that I found the results of the negotiations complex, even by the standards of the CAP, and the Minister will of course have a much deeper understanding of the results than I or, I regret to say, even the most learned of my constituents could expect to acquire. The Minister will correct me if I am mistaken, but I believe that one of the outcomes of the negotiations has been that the national reserve is now available to the Minister and that he also has scope for discretion to resolve the problem equitably within the new structure. In other words, as a result of the negotiations, the Minister is able, on a national and domestic basis, to resolve the concerns of my constituents who might find themselves in the unenviable position of acquiring a farm without acquiring the grants that one would have expected to go with it.
	I say that this debate is more apposite even than I had imagined, because I believe that the Minister now has the discretion. In that case I am addressing the right person rather than addressing indirectly an unseen Commission. I believe that the Minister can now resolve the problem and that, in appealing to him, I am appealing to the very man in all of England who can help my farmers to achieve an equitable resolution if they have bought their farms late in the day. If that is the case, I hope that the Minister will reassure me that in the course of the next few weeks and months he will propose a clear scheme that will ensure equitable treatment for those farmers.
	I want to turn from that particular issue to a wider question about the effect of the CAP on my farms and, in particular, on my dairy farms. I say, grandly, "my dairy farms". I do not own one personally and there are times when I am profoundly grateful not to be the owner of a dairy farm in West Dorset. The Minister will be well aware from our previous encounters in Adjournment debates, and from the record of my encounters with his predecessors, that the great preponderance of farming in my constituency is dairy farming. Indeed, the preponderance of dairy farming has increased as a result of the virtual disappearance of the pig industry from my constituency. I would not be surprised if the present scheme saw a reduction in arable farming in my constituency, so dairy farming may soon be the only kind of farming left in the area. In any event, many of my farmers are dairy farmers.
	Of all the people currently residing in this country, my dairy farmers—and, I fear, those in other constituencies—are the people who are least able to understand their predicament, and whose predicament is least comprehensible. They live in an Alice in Wonderland world, in which all the normal rules of economics are reversed. Instead of being allowed to make up for lack of revenue by increasing production, they are prohibited from so doing. Instead of being allowed to price into a market, they are effectively capped, and instead of being able to exert a counterbalancing pressure against the pressures of their customers, they are picked off one by one by much larger intermediaries and supermarkets. In short, they are as cogs in a machine whose working they cannot understand, rather than normal producers in a normal marketplace.
	Those points will be familiar to the Minister. Indeed, it was with those points in mind—the Minister will correct me if I am wrong—that the Government rightly went to the negotiating table and sought a decoupling of subsidy from production and an early end to the system of quotas. My dairy farmers would have welcomed with open arms a genuine system of decoupling of payments for the dairy industry and an early end to quotas. They wanted a level playing field and economics that resembled the real world. Such an arrangement would have offered a new lease of life to some of my dairy farmers who are precariously poised on the edge of survival. However, many of my dairy farmers are very disappointed by the prolonged schedule for changes to the quotas; the slow process by which the quotas will be enlarged in the early years; the fact that the later enlargements of the quota have been abandoned, at least for the time being; and the fact that the payments will still not be decoupled during the period in which quotas remain.
	On that note, I do not believe that I can be the only Member who is unable to explain to some of my dairy farmers exactly what the solution on decoupling for dairy payments is to be. I say that because, in this case, the NFU, which provides an admirable service in explaining such matters to their members, of whom I am one, says something that no ordinary human being can easily understand. For the sake of my dairy farmers, I hope that the Minister can cast some light on the matter. The NFU report tells us:
	"There will be no decoupling of dairy direct payments until the reform is fully implemented"—
	which I can understand—
	"except where a Member State opts for the regional implementation of decoupling where an earlier integration of dairy direct payments is possible. We are currently exploring whether this option will allow the UK to implement decoupling of dairy premia earlier in the UK."
	The NFU may be exploring that; my farmers would love to explore it, but neither I nor they are capable of doing so. I hope that the Minister will help the House, help me and, more important, help my dairy farmers by explaining whether the UK is actually going to be able to decouple those payments and, if so, at what date, and how that will relate to the phasing out of quotas and/or the enlargement of quotas in the UK.
	To return to the point that I was making about farmers who were unlucky enough to buy late in the process, no one in West Dorset who is currently planning investment in the dairy industry, whether it be replacement or new investment, can, given the confusion that reigns in the industry, possibly make a rational investment decision. Early information about what is going to happen is obviously critical if rational investment decisions are to be made.
	Finally, will the Minister tell us his understanding of what has been settled for the long term? Farmers in West Dorset are, if anything, long-termists. I suspect that they are by no means unique in that. Were they interested in short-term profit, they would not be in farming today. They look to the long term. Many of them are in farming because many members of their family before them were in farming. Many of them remain in farming in the hope that their children might be persuaded to go into farming. Many of them are willing, as they have been for the past several years, to take what are, in effect, wages that are way below the national minimum wage, or returns that are way below the cost of capital. They live what is almost a subsistence existence in the hope of long-term salvation.
	It is thus of great importance that farmers should see clearly where the Minister thinks the future lies. Are they to assume that the current semi-settlement, in relation not only to the decoupling, lack of decoupling or partial decoupling of dairy payments but also to the similar questions on arable and single farm payments and on the whole range of agricultural production, is the first step on the way to a genuine decoupling and genuinely open markets; or are they to assume that this is broadly as good as they will get for the next decade or two? It will be important to my farmers to know, in general, and to the extent that the Minister can tell us, the answer.
	If the answer to that question is genuinely uncertain, many farmers will be bound to take a pessimistic view and disinvest. If the answer is that there is cause for optimism in the long term, many of them may sustain for a period what may be difficult times ahead, in the hope of realising that better future. I hope, therefore, that the Minister will be able to give us some guidance and that, in the light of that guidance, my farmers will be able to make rational decisions.

Alun Michael: It is always a pleasure to respond to the right hon. Member for West Dorset (Mr. Letwin) because he always raises issues that relate directly to his constituents' interests, and the House is always at its best when hon. Members relate policies to their constituents. He raises such issues in a questioning and challenging way, not in a confrontational way. I hope that I can help him with some of the issues that he raises, but he needs to wait a little longer on others because, of course, it is only 10 days since we achieved a hard-won decision after long negotiations late into the night over several days.
	I endorse the right hon. Gentleman's point about such issues being complicated, but there is complication not so much in the settlement reached in the CAP discussions, but in the CAP on which those negotiations were based, so expecting a clear and simple statement of where the settlement leaves individual farmers is a little way down the road. He rightly acknowledged that a great deal has changed since he originally sought to initiate the debate. Indeed, just 10 days ago, we had considerable success in the negotiations, but I accept the point that these are complex issues.
	The right hon. Gentleman referred to farmers taking a long-term view, and I acknowledge that that is the case. Those who have spent several generations in the industry are looking at a period of major change. Indeed, it is fair to say that the farming industry can look forward, with more hope than has been the case for many years, both to the opportunity of being truly competitive and to having its competitiveness and efficiency recognised, and CAP reform is a part of the move in the right direction.
	One of the most important contributions in recent years was, of course, the report by Sir Don Curry and the commission on a sustainable future for farming and food, which looked at how to make farming competitive and recommended ways in which individual farmers can take decisions that will increase their returns—the farm-gate prices, as they are described—for the work that they undertake. I point to the seminal importance of that report and the way in which it prepared the ground for the CAP reform.
	As the right hon. Gentleman said, some farmers have recently acquired farms, but they could have been in no doubt about the way in which this country wanted to reform the CAP. I believe that I am right in saying that he wants the way in which the regulations result from the reform to be considered. There will be consultation on those regulations, when the issue that he raises can be considered, but the rule of caveat emptor—let the buyer beware—applies, and any purchaser in recent months, or even the last couple of years, must have made a purchase in the knowledge that attempts were being made to reform the CAP. If the results are complex, they are hardly more complex than the situation in which farmers have had to operate for a number of years.

Oliver Letwin: I may not have made myself clear. I do not at all ask the Minister to protect the successor from the effects of the change in the grant regime. I wholly subscribe to his view that purchasers should have been aware that the grant regime would change. The question is whether the new grant will be paid to the new owner, or whether, as has been feared, the grant may in some cases accrue to the old owner, who would thereby be serendipitously enriched, pauperising the new owner, who would have expected to receive the new grant.

Alun Michael: I am not sure that I can give the right hon. Gentleman a complete answer, but let me try. Certainly, some flexibility exists on a national basis to deal with some issues, as we will do once we have examined fully all the options open to us. I believe that the situation is that once farmers have claimed at least 80 per cent. of their entitlement, they are free to transfer some or all of it to another farmer within the same member state, with or without land. However, entitlements may only be leased along with the equivalent number of hectares. Details need to be consulted on, but in principle a capacity exists to respond to some of the issues that the right hon. Gentleman raised.
	A national reserve will provide additional means of obtaining entitlements. Those eligible to apply will be defined in Commission implementing rules, so, clearly, we need to examine the detail to know how to respond to them. But they will include new entrants, those who inherited or bought land from 31 May 2003 which was leased during the reference period, those who took on a lease during the reference period and could not adjust the terms of the lease—who could not negotiate a lower rent—and developers who bought land or otherwise made investments to increase production during the reference period. Entitlements received from the national reserve cannot be transferred for five years. I am not sure that that general framework necessarily answers the question in relation to the situation of an individual farmer, but I hope that it does something to illustrate the sort of issues that we will have to consider and responds to some degree to the concerns raised by the right hon. Gentleman.
	It is worth looking at the situation in Dorset, and West Dorset in particular. It is an area of mixed farming containing predominantly medium-sized livestock and dairy farms. The right hon. Gentleman rightly expressed concerns that those sectors would be affected. The area will be affected in particular by the introduction of the new single farm payment and further reform of the dairy regime. The detailed impact on farms will depend on how the package is implemented, which will be the subject of consultation. That will be the point at which some of the right hon. Gentleman's concerns, and the concerns of farmers in his constituency, can be raised. Much will also depend on how farmers respond to the new challenges and opportunities that present themselves.
	In relation to the right hon. Gentleman's comments about people wanting to continue in the farming industry for many years to come, I am struck by the commitment of many farmers, including young farmers, to the industry, and the imaginative way in which many are finding methods of marketing their product, finding niche markets or banding together through co-operative marketing to make sure that they get a better return. I am also impressed that the predictions are that the reforms through the CAP negotiations are likely to help to increase average farm incomes by some 12 per cent. in this country and possibly by more over a longer period. That, of course, will depend on the details of the implementation. It will also depend on the way in which farmers seek to drive forward their businesses.
	For the milk sector, lower intervention prices are likely to feed through to lower farm gate milk prices. Compared with the Agenda 2000 agreement, however, the rate of compensation for price cuts has been improved. Furthermore, those payments are now being phased in faster than the support price cuts—over three years compared with four years of price cuts. That will provide dairy farmers with aid during the important transition period. It is likely, however, that overall the income of the typical dairy farmer will be reduced. Concerns existed about the ways of dealing with dairy reform, particularly the failure to cut prices and end quotas sooner. We would have liked more progress on milk, and particularly an end to quotas. As we have warned, the EU may be forced to return to the matter sooner because of the failure to be more radical. Useful further steps are being taken along the reform path, however, and welcome flexibility exists for member states to take early action on decoupling in the milk sector. We will consult shortly on using that option once we have had further clarification from the Commission on the implications. I am sure that the right hon. Gentleman will agree that we need to be clear about the working through of the decisions taken by the Commission to make sure that we do not introduce unintended consequences in the way that we implement the decisions, especially in relation to early decoupling. The dairy industry has certainly faced immense difficulties during recent years. The right hon. Gentleman explained the situation so courteously that I shall not spend time taking him back through the history of decisions taken by the past Conservative Administration.
	The new arrangements on the decoupled single payment will have several advantages. Farmers will be freed from the need to grow specific crops or keep specific numbers of animals because they will instead be allowed to gear their production to the market. There is no doubt that there are examples of farmers who have broken though the system of subsidy and support to engage with their market, sometimes very productively. The arrangements will reduce the negative impact of the CAP on the world's poorest farmers by cutting overproduction of subsidised food, and the incentive to intensify production and damage the market will be removed. The EU will be allowed to engage positively in World Trade Organisation discussions with a significant offer on agricultural trade.
	It is hard to overstate the importance of the agreement, which transfers the core elements of the CAP and sets a new direction for its future evolution. In the short term, an increase in farm incomes is predicted. Liberalising the market will reward the efficiency of British farmers and offer them an opportunity to gain benefit from the efficiencies that they have demonstrated for several years—in some ways, they have perhaps been penalised for that due to the way in which the system has operated.
	I sympathised with the right hon. Gentleman when he mentioned complexity. Simplifying the CAP will reduce the burden on farmers and will lead to a substantial shift of support from production to a wider range of rural and environmental activities. It is worth making the point that the fact that Britain has taken the lead on modulation has brought forward rural development that is the envy of many other countries in many ways. There is a need for diversification of the wider rural economy but enabling farmers to diversify and allowing their families to move into other areas has had many benefits. I could cite a long list of examples of farmers and farm families in Dorset who have taken advantage of such opportunities.
	Breaking the link between farm subsidies and production to reconnect farmers with their markets and reducing damaging environmental impacts and bureaucracy are at the heart of our approach on sustainable food and farming. The CAP has moved in the direction that the Government and the Curry report flagged up. Cross-compliance so that subsidies are dependent on meeting standards for key areas such as the environment and animal health and welfare is also important, as is the reduction of support prices for butter and rice to bring them closer to world prices, which will benefit consumers.
	It is fair to say that the deal includes elements that go beyond the Commission's initial proposals, such as the national envelopes enabling schemes that will promote sustainable farming. There will be a further switch of resources to the second pillar and an earlier start for modulation. The second pillar package is more than a third larger than that in the January proposals. We have succeeded in protecting UK farmers from the immediate threat of an unfair settlement as part of the financial discipline process by varying the terms of modulation.
	The new single farm payment may be used to replace the plethora of existing bureaucratic direct payment schemes and to free farmers to produce the safe, high-quality food that the market wants. Many of the approaches on marketing in this country are starting to produce results, and it is probably fair to say that that has been more successful in the south-west than in any other part of the country. A clear profile of food from the west country has been developed and the profile of individual counties—Somerset, Devon, Cornwall and Dorset—has been maintained within that. That can only be good for the link between agricultural production and benefits through tourism such as the use of local products by restaurants and the hotel trade, and it will lead to an increasing virtuous circle among the products of the farm economy and a variety of other aspects, such as the wider economy of rural tourism.
	As I said, the new single farm payment will be a major step forward. Overall, the proposals are estimated to give rise to net economic—
	The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.
	Adjourned at five minutes past Eleven o'clock.